ADNOC Distribution beats expectations with 18% annual growth in its Q1 results

ADNOC Distribution on Thursday announced first quarter of 2024 results exceeding analysts’ estimates as EBITDA increased to $248 million.

Analysts had been anticipating $233 million, but the company delivered an 18% year-on-year rise in EBITDA with net profit increasing to $150 million.

The ADNOC entity also reported a YoY fuel volumes increase of 17% as non-fuel retail transactions lifted by 7%.

Growth trajectory

The UAE’s largest fuel and convenience retailer said the financial results confirmed that it remained firmly on track to achieving goals outlined in its five-year strategy.

The progress follows sustained momentum in both fuel and non-fuel retail segments, including developments in ADNOC Distribution’s pipeline of more than 20 artificial intelligence (AI)-driven initiatives - such as Fill and Go and its Fuel Demand AI Model - aimed at accelerating growth and enhancing operational efficiencies.

Strategy in action 

Eng. Bader Saeed Al Lamki, CEO of ADNOC Distribution, said the “robust” results were a testament to the five-year strategy, announced earlier this year, which prioritised domestic growth, international platforms, and future-proofing the business. 

“We are well positioned to achieve our operational objectives for 2028, aiming to expand the ADNOC Distribution network to 1,000 stations, increase the number of fast and super-fast EV charging points to at least 500, grow our non-fuel transactions by 50%, and increase the number of convenience stores by 25%,” he said. “The integration of AI, a cornerstone of our strategy, continues to yield tangible results across our operations.”

AI-driven efficiencies

From an operational efficiency perspective, the Fuel Demand AI Model  harnesses predictive demand analytics to optimise fuel delivery across the network. 

It is projected to prevent potential lost sales totaling $27 million during a five-year period and offers a fuel forecast accuracy exceeding 95%, far surpassing conventional methods averaging 60% to result in reduced total fuel inventory runout. That facilitated a 10% reduction in total fuel truck emissions through optimised delivery timing efficiencies, in line with objectives to reduce carbon emissions intensity by 25% by 2030.

ADNOC Distribution continued a “disciplined rollout” of fast and super-fast electric vehicle (EV) charging points, expanding its network in Q1 to 89, and remaining on track to more than double its profitable EV charging points network to 150-200 by the close of 2024.

Positive performance

Operational highlights for the quarter included sustained growth in fuel volumes in all regions where the company operates. 

The GCC region saw a 9% increase, driven by factors including increased traffic across the network, sustained economic growth, ongoing network expansion, and higher contribution from international operations in Saudi Arabia.

Amid planned capital expenditures of $250 million-$300 million in 2024, ADNOC Distribution has already invested $46 million.

Since its initial public offering in 2017, the company has provided shareholders with about 90% ROI through increased market value and dividends.