ADNOC Distribution delivers strong growth in the first half of 2023

ADNOC Distribution announced its first half 2023 results, reporting a 9% year-on-year increase in underlying EBITDA to AED1.57 billion, and a 2% year-on-year increase in net profit excluding inventory movements to AED1.03 billion, driven by higher fuel volumes and company-wide efficiency improvement initiatives.

ADNOC Distribution experienced a notable year-on-year growth in total fuel volumes in the UAE and KSA, witnessing a 9% increase in H1 2023 compared to H1 2022. Retail fuel volumes, which account for about 70% of the total volumes, increased by 8% year-on-year. The Company’s corporate fuel volumes recorded sustained growth, achieving a substantial 12% year-on-year increase, underpinned by the management’s efforts to strengthen the commercial business portfolio.

Eng. Bader Saeed Al Lamki, CEO of ADNOC Distribution, said: “ADNOC Distribution has delivered robust results in the first half of the year, driven by strong operating performance and efficiency improvement initiatives across the Company. As a future-focused business, we remain on track to meet targets for the year in OPEX savings and network expansion locally and internationally, and expect this growth momentum to continue into the second half of the year. Supported by our firm belief in our smart growth strategy while embarking on our transformational plans that focus on innovation and upgrading the customer experience, we remain committed to achieving sustainable growth and rewarding returns for shareholders in the long term. We continue to actively support and contribute to the UAE’s strategic vision by reducing carbon emissions from our operations and supporting sustainable mobility objectives. This approach aligns with our future-proofing strategy and capitalizes on the opportunities offered by the energy transition.”

ADNOC Distribution stated that it had accelerated the execution of its growth strategy by opening 13 new service stations in the UAE in the first half of the year, including three in Dubai. As of 30 June 2023, The Company’s domestic network expanded to 511 service stations (with 42 in Dubai) reinforcing its leading position in the UAE’s fuel retail sector. ADNOC Distribution remains well-positioned to achieve its full-year target of expanding the network with 25 to 35 new service stations.

The Company made significant progress in its international expansion in February 2023 by completing the acquisition of a 50% stake in TotalEnergies Marketing Egypt, one of the top four fuel retail operators in Egypt. The joint venture has successfully expanded its aviation fuels business by securing the right to supply aviation fuel to Etihad Airways for flights fuelled in Cairo. In the fuel retail segment, the joint venture opened a new station in the second quarter of 2023. ADNOC Distribution plans to open its first three branded ADNOC flagship service stations in Cairo during the third quarter of 2023.

ADNOC Distribution remains committed to exploring growth opportunities and new revenue streams arising from energy transition. The Company is keen on developing new mobility solutions such as Electric Vehicle (EV) charging while maintaining a strong focus on sustainability-driven initiatives. To bolster its efforts in this area, the Company has partnered with TAQA to establish E2GO. Once formed, this joint venture will build and operate EV services infrastructure in Abu Dhabi and across the UAE. In addition, ADNOC Distribution already operates 38 EV charging points at its service stations.

The Company recently entered into a strategic partnership with Abu Dhabi’s Department of Municipalities and Transport (DMT) to explore and establish sustainability opportunities for Abu Dhabi's light and heavy-duty transportation sector. The Company will collaborate with the DMT-affiliated Integrated Transport Centre (ITC) in Abu Dhabi to develop critical sustainable mobility solutions, focusing on core mobility areas such as low-emission and zero-emission vehicles.

In January 2023, ADNOC Distribution announced its plan to reduce carbon intensity by 25% by 2030, by putting sustainability at the core of its day-to-day operations to future-proof its business and deliver sustainable long-term shareholder value. Since then, the Company has embarked on a number of tangible initiatives to fulfil this commitment and address the energy transition. A significant step in this direction was the partnership with Emerge, a joint venture between Masdar and EDF. As part of the Company’s phased approach to UAE-wide solar rollout to generate clean energy, the partnership will develop on-site solar power across the Company’s service stations network in Dubai.