ADNOC Distribution records $109m net profit in Q1 2020
The company said in an official statement that it remains resilient with a strong balance sheet, despite the impact of COVID-19 and will continue delivering on its smart growth strategy
The Abu Dhabi National Oil Company (ADNOC) Distribution has announced its Q1 2020 financial results, recording an underlying EBITDA of $171m, a growth of 4.7%, while net profit was $109m for the quarter.
The company - which opened seven new stations in Q1 2020 - said in an official statement that it remains resilient with a strong balance sheet and will continue delivering on its smart growth strategy.
ADNOC's retail fuel gross profit witnessed a 13.1% year-on-year growth in the first quarter; this was driven by higher margins and volume growth in the first two months of 2020.
Although retail fuel volumes declined by 1.9% in the quarter, due mainly to the business impact of COVID-19 in March, commercial fuel volumes remained stable year-on-year.
ADNOC noted that despite the negative impact of the current COVID-19 on the reported EBITDA and net profit for Q1 2020 by $20m, majority of the year-on-year decline is attributable to an unfavorable base period which benefitted from one-off reversals and $36m worth recoveries.
The company has said that it has "ample liquidity" to weather the immediate impacts of the ongoing crisis and is exploring growth opportunities presented by the current environment. ADNOC's liquidity was at $2.2bn as $1.4bn in cash and cash equivalents and $0.8bn in unutilised credit facility.
Speaking about its financial results, acting chief executive officer of ADNOC Distribution, Ahmed Al Shamsi, said: "We remain committed to our shareholders by protecting our business through the application of robust business continuity measures and the strengthening of our business resilience, in readiness to return in a position of strength and continue our growth trajectory when the effects of the pandemic subside.”
The company also announced that its 2020 dividend policy is set to continue with an increase of 7.5% to $700m, after a 62% increase in the 2019 dividend to $650m.
The company’s shareholders have approved amendments to the dividend policy for 2021 onwards, setting an $700m dividend for 2021 and a dividend equal to at least 75% of distributable profits from 2022 onwards.
ADNOC has been responsive to the ongoing COVID-19 situation by undertaking several health and safety measures, including services to enhance customer experience and protect staff and customers and the daily cleaning of its sites.
The company has accelerated its digital transformation strategy as part of its response. ADNOC's Mobile Pay technology, which allows contactless refueling and payment witnessed a customer uptake of the ADNOC Distribution Wallet, by more than 100,000 users in the first quarter of the year to more than 730,000 users.