ADNOC Distribution to Pay $350 Million As Interim Dividend

Underscoring its commitment to deliver consistent and attractive returns to its shareholders, ADNOC Distribution, the UAE’s largest fuel and convenience retailer, which is listed on the Abu Dhabi Securities Exchange (ADX), on Monday announced that it will pay an interim of dividend of $350 million for the first half of 2024.

The deadline for purchasing shares to qualify for the interim dividend payment is 26 September with eligibility based on shareholders recorded in the share register on 30 September 2024, the company said in a regulatory filing.

The H1 dividend marks the first instalment of the expected full-year 2024 dividend of $700 million and this aligns with ADNOC Distribution’s 5-year dividend policy, which sets an annual dividend of $700 million or a minimum of 75% of net profits, whichever is higher, from 2024 to 2028, subject to Board discretion and shareholder approval.

The second and final dividend for 2024 is expected to be paid in April 2025, subject to the Board’s recommendation and shareholder approval. The full-year 2024 dividend would offer a 5.6% annual dividend yield, based on the share price of $1 as of 20September 2024.

The dividend policy provides long-term visibility on expected shareholder returns and potential upside from future earnings growth, reinforcing ADNOC Distribution’s commitment to consistent shareholder value creation.

ADNOC Distribution CEO Bader Saeed Al Lamki said that the company has demonstrated exceptional performance in H1 2024, driven by strong financial results and confidence in future growth. The successful execution of their smart growth strategy reinforces the company’s attractive value proposition, while its healthy balance sheet and robust cash generation underpin future growth and shareholder returns, he said.

Reaping Profits

In the first half of 2024, ADNOC Distribution reported a 16% year-on-year (y-o-y) increase in Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) to $515 million and a 7.7% y-o-y rise in net profit to $319 million, driven by higher fuel volumes, increased contributions from global operations, and growth in the non-fuel retail business.

ADNOC Distribution generated free cash flow of $488 million in H1 of 2024, comfortably covering the interim dividend of $350 million. As of 30 June 2024, it continued to maintain a strong financial position with a net debt-to-EBITDA ratio of 0.53x and liquidity of $1.7 billion, including a cash position of $925 million, positioning it favourably for future growth and shareholder value creation.

Since its IPO in 2017, ADNOC Distribution has delivered solid returns to shareholders through enhanced market value and consistent dividends. It has paid a total of $4.4 billion in dividends since IPO, including the H1 of 2024 dividend.

With a record EBITDA of $1 billion in 2023, it is on track to deliver on its growth commitments and is well-positioned for its next phase of strategic and accelerated growth.

In addition to the dividend policy, ADNOC Distribution unveiled a new five-year growth strategy earlier this year, focused on domestic growth, international platforms, future-proofing the business, enhancing digital capabilities, and driving operational efficiencies. This strategy aims to position the company for long-term growth while continuing to deliver shareholder value.