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Adnoc Distribution, the UAE's largest fuel and convenience retailer, reported a 2.2% increase in its second-quarter net profit as the company plans to expand its network.
Net profit reached MAD 595 million for the three-month period ending in June, the company said in a regulatory document filed with the Abu Dhabi Securities Exchange, where its shares are traded. The company's revenues decreased by 5.2% to 5.5 billion dirhams.
"For the remainder of 2019, we are focused on accelerating the expansion of our home network, particularly in Dubai, and on growing our non-fuel business to provide a superior experience in the future." our customers, "said Acting Director General Saeed Al Rashdi.
"Our priorities remain growth and shareholder returns underpinned by our progressive dividend policy.As previously announced, we intend to boost the revenue growth of our both oil and non-oil businesses, and we targeted more than 3.67 billion dirham EBITDA [earnings before interest, tax, depreciation and amortisation] by 2023, "he added.
Adnoc Distribution, which had introduced 10% of its shares in 2017, has since expanded its portfolio by expanding its network in the UAE to include 379 retail outlets by the end of the second quarter.
Three new stations were opened in the country in the first half of 2019, two of which are in the process of being commissioned. The company has remained on track to open 20 to 30 new stations in the emirates this year, with a development goal in Dubai, said Adnoc Distribution in a statement.
Net income for the first half of the year increased by 4.3% to 1.17 billion dirhams, despite a 1.7% decrease in total fuel volume and lower inventory gains. The company attributed this performance to its progress in optimizing costs and maintaining momentum in convenience stores.
Total fuel volume decreased by 1.7% in the first half of the year, which, according to Adnoc Distribution, is due to a 3.5% decrease in retail fuel volume, increased competition and longer holidays for the period. The company's business segment performed well, however, up 5.5% in the first half, driven by higher sales of liquefied petroleum gases, lubricants and base oil. Sales for the aviation sector have also increased, the company said.
In an interview with BloombergMohamed Al Hashimi, managing director, said Adnoc Distribution was open to the acquisition and focused on the Indian lubricants market, also on the radar of the UAE's other fuel retailer, the Emirates National Oil Company.
Enoc and Adnoc, through its parent company, have entered into partnership agreements with Indian Oil, backed by the state, for the sale of their lubricant products in the fast growing Indian market.
Earnings per share for the quarter increased 2.9% to 0.048 dirhams, compared to 0.047 dirhams for the same period last year.
Free cash flow in the second quarter increased by 17.3% to 658 million dirhams compared to the same period of the previous year. Free cash flow in the first half of the year increased 21% to 1.3 billion dirhams compared to the same period last year.
At the end of the first half of 2019, the company's network of convenience stores was 262 in the United Arab Emirates, with the opening of 12 new stores across the United Arab Emirates. Ten stores were added to existing outlets in the second quarter only.
Last Updated: August 4, 2019 10:39
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