ADNOC Distribution, the UAE’s leading fuel and convenience retailer, has reported its Q1 2021 financial results, recording an underlying EBITDA of US$201.47mn with net profit of around US$171.79mn for the quarter
The company has further announced that the cash flow generation remained strong with free cash flow of around US$227.33mn.
Supporting the nation’s ongoing fight against COVID-19 was a continued focus in Q1, with the company ensuring all health and safety measures were maintained. In Q1 2021, ADNOC Distribution became the first fuel retailer globally to ensure 100% vaccination of its frontline employees, with more than 10,000 staff now having chosen to take their first dose.
A strong financial performance
The company’s retail fuel business posted strong operational performance, with retail fuel gross profit growing by 12.6% year-on-year in the first quarter, led by higher margins.
As part of the company’s ongoing transformation, it remains committed to reducing operating costs and ensuring continued competitiveness in the UAE fuel retail and convenience store sector. Throughout the Q1 2021, ADNOC Distribution’s operational expenditure (excluding depreciation) decreased by 6.5% compared to the same quarter last year as part of the company’s drive to enhance operational efficiencies.
ADNOC Distribution maintains a strong financial position, with a robust balance sheet at the end of the Q1 2021. The company remains well positioned to expand both its domestic and international portfolio in-line with its smart growth strategy. As of 31 March 2021, the company’s liquidity was at around US$1.39bn.
Positioned for growth
During the Q1 2021, ADNOC Distribution continued to deliver on its smart growth strategy, to bring modern, digitally-enabled fuel retail convenience to customers and communities domestically and internationally, with the opening four new stations in the UAE. The company intends to accelerate delivery momentum and remains on track to meet its guidance to open total of 70 to 80 new stations across the UAE and KSA by year end, of which 30-35 are expected to be opened in the UAE. Of the four new stations opened in the UAE, two were ‘ADNOC On the go’ neighborhood stations, designed to provide increased customer convenience and meet the needs of previously underserved locations.
To provide a modern, digital experience to customers and to support the company’s ambitious non-fuel retail strategy, a total of 14 ADNOC Oasis convenience stores were refurbished throughout the first quarter. With increased customer-centric initiatives, the average gross basket size increased by 2.2% as at 31 March 2021 as compared to the same period in 2020.
In addition to its growth in the UAE, the company remains well positioned to harness international growth opportunities, particularly in Saudi Arabia, building on three definitive agreements signed in 2020 and 2021 to acquire a total of 35 stations, which will bring its total network in the country to 37 stations.
Ahmed Al Shamsi, acting chief executive officer of ADNOC Distribution, said, “Throughout the first quarter of 2021, we made a significant achievement through the vaccination of 100% of our frontline employees, and I am extremely proud of their dedication to always upholding the highest standards of HSE.
Together with upholding the highest standards of health and safety for both employees and customers, the company continues its drive to enhance its customer offering through ADNOC Rewards, the UAE’s first customer loyalty program from a fuel provider, and the launch of its partnership with Etisalat Smiles, which allows members of both platforms to cross-exchange points and maximise benefits. A total of 27 new partners were added to the Reward programme in Q1, offering members even more deals and discounts from some of the UAE’s leisure and entertainment brands.
As of the end of Q1 2021, ADNOC Rewards has more than one million registered users and has reached the significant milestone of over 12 million transactions since launch. A network wide promotion was launched in Q1, for all ADNOC Rewards members, who can benefit from an AED 5 saving off any AED 15 spent in ADNOC Oasis, which ran until the end of April 2021.