ADNOC Distribution announced that its net profit rose to 851 million dirhams in the fourth quarter of 2020. Basic earnings before deduction of interest, tax, depreciation and amortization for the same period were 1.1 billion dirhams. In total for the year 2020, the net profit was 2.4 billion dirhams, while the basic earnings for the year before deduction of interest, tax, depreciation and amortization amounted to 3.6 billion dirhams.
The company maintained its strong financial position that qualifies it to continue its efforts to expand locally and internationally, in line with its policy of smart growth, in addition to fulfilling its obligations to distribute profits, as the company’s liquidity amounted to 5.6 billion dirhams as on December 31, 2020, including 2.8 billion dirhams in the form of cash and the equivalent, And 2.8 billion dirhams in the form of untapped credit facilities.
During the past year, the company opened 64 new stations across the UAE, which exceeds its previous plans to open 60-50 new stations during 2020, and represents 10 times the number of stations opened in 2019. ADNOC Distribution also expanded its network significantly in Dubai during 2020, as 20 new stations opened in the emirate.
The company has also increased the number of ADNOC “On-the-Go” stations, which are designed to provide refueling services and convenience stores to residential neighborhoods and areas where regular stations are difficult to build. The company has opened 38 such stations across the country. Over the past year, 100 ADNOC Oasis stores have been upgraded, compared to previous plans to modernize 80-90 stores.
In addition to its growth in the UAE, ADNOC Distribution accelerated its expansion at the international level by announcing on December 30, 2020 the conclusion of a final agreement to acquire 15 service stations in Saudi Arabia. This deal was followed yesterday by the announcement of the implementation of two additional final agreements to acquire 20 other stations in Saudi Arabia. Acquisition deals are subject to certain conditions, including obtaining regulatory approval.
The first agreement includes the acquisition of 16 stations in the Riyadh region, at a value of 56.9 million dirhams ($ 15.5 million). The new acquisitions will bring the total of stations in Saudi Arabia to 37 service stations.
Ahmed Al Shamsi, Acting CEO of ADNOC Distribution, said: “ADNOC Distribution” has a strong and solid position that allows it to continue during the next year in the march of successes it has achieved inside and outside the UAE, and to move forward towards achieving its goal of increasing EBITDA. To at least 3.67 billion dirhams by 2023.
He added that we will continue to seek more opportunities to expand internationally, and to achieve remunerative returns for our shareholders.
In July 2020, ADNOC Distribution worked to upgrade the “ADNOC Rewards” program, and the program achieved a great achievement by registering more than one million members during the last quarter of the year, surpassing the total number of transactions made using the “ADNOC Rewards” program, since the company launched the Points Program. The threshold of 8 million transactions.
In September 2020, ADNOC announced the completion of a private placement of 1.25 billion shares of ADNOC Distribution Company (estimated at 3.67 billion dirhams), and sold them to investment institutions, which raised the free circulation ratio to 20%. This is the largest IPO ever undertaken by a public shareholding company in the GCC.
As part of the gradual dividend policy, the ADNOC Distribution Company Board of Directors proposed a cash dividend of 1.285 billion dirhams (10.28 dirhams per share) for the second half of 2020, which will be presented to shareholders for approval during the general assembly meeting expected to be held on March 16, 2021.
And subject to the approval of the shareholders, total dividends for the fiscal year 2020 are expected to reach 2.57 billion dirhams (20.57 dirhams per share), which represents an increase of 7.5% compared to the dividends distributions for the year 2019, according to the approved dividend policy, which provides an annual profit rate of 5.3 % For 2020 (Based on the share price of AED 3.88 as of February 14, 2021).
The company distributed half of the 2020 dividends last October, and it is expected that the second part of the 2020 dividend will be paid in April 2021 after the approval of the shareholders.
The Board also recommended amendments to the dividend policy with the aim of imparting more clarity and transparency to the returns of the shareholders, as the Board proposed to distribute dividends for the year 2022 amounting to 2.57 billion dirhams ($ 700 million) as a minimum (compared to a minimum of 75% of the dividends distributable according to the policy. Current) and a dividend of not less than 75% of the distributable profits from 2023 onwards.
This proposal will be presented to the shareholders of the company at the next annual general meeting. If approved, it would provide shareholders with guaranteed predictable returns until April 2023.
These amendments, which were recommended by the Board to introduce the dividend policy, are based on the company’s strong financial position at the end of 2020, and confidence in its promising growth prospects and its ability to generate cash flows in the future. Despite the current market conditions, ADNOC Distribution is confident and steadfast in its ability to fulfill its strategic commitments and achieve sustainable returns for its shareholders.
ADNOC Distribution expects to continue distributing half of the annual profits in October of this year, and to distribute the remaining half of the profits in April of the following year. The new dividend policy reflects the company’s strong record of gradually increasing its dividend distribution to its shareholders, supported by a stable business model with predictable cash flows.
Follow the economic statement via Google News