KHALEEJ TIMES, Wednesday, Mar 17, 2021 | Shaaban 3, 1442
Adnoc Distribution shareholders approve changes to dividend policy, setting minimum of Dh2.57b in 2022
Emirates:
Adnoc Distribution, the UAE’s largest fuel and convenience retailer,
announced that shareholders have approved all agenda items, including
amendment to its dividend policy at its Annual General Assembly meeting, its
second to take place virtually.
The company’s robust and continued growth, despite the ongoing challenges faced
as a result of the Covid-19 pandemic, has enabled the setting of a progressive
dividend policy for investors for the upcoming two years, with Dh2.57 billion
dividend for 2021 (20.57 fils per share) and a minimum of Dh2.57 billion
dividend for 2022 (compared to minimum 75 per cent of distributable profits as
per previous policy).
The dividend policy for the years thereafter remains unchanged at a dividend
equal to at least 75 per cent of distributable profits. The approved dividend
policy amendment recognizes the Company’s strong financial position at the end
of 2020 and confidence in its growth prospects and cash-flow generation ability
going forward. Despite current market conditions, Adnoc Distribution remains
confident and steadfast in the delivery of its strategic commitments and
sustainable returns for its shareholders.
Shareholders also approved a second and final dividend payment of Dh1.285
billion (10.285 fils per share) for 2020, resulting in a full-year dividend of
Dh2.57 billion (20.57 fils per share) and representing an increase of 7.5 per
cent compared to 2019, consistent with its progressive dividend policy.
Speaking at the General Assembly meeting, Dr Sultan Ahmed Al Jaber, Chairman of
Adnoc Distribution, reassured shareholders on the Company’s continued focus to
achieve disciplined, smart and profitable growth in the local and international
markets while taking into consideration all necessary measures to ensure the
safety and well-being of customers and employees.
In his opening remarks, Al Jaber commended the guidance and efforts made by the
UAE’s wise leadership, and the continued efforts of the National Emergency
Crisis and Disaster Management Authority (NCEMA), Ministry of Health, Ministry
of Interior, Ministry of Defence, health authorities across the UAE and other
government agencies, which made the UAE a global leader in the fight against
Covid-19.
Al Jaber further commented on Adnoc Distribution’s continued delivery on its
smart growth plans in 2020, with the opening of 64 new service stations across
the UAE, a ten-fold increase compared with 2019; with a strong focus on Dubai
where presence was significantly increased with 20 new stations. This also
included 38 ‘Adnoc On the go’ stations nationwide, which offer fuel and retail
to communities where traditional stations have previously proven to be
impractical. The Company also revitalised 100 Adnoc Oasis convenience stores to
offer a fresh and modern environment.
He said: "We continue to lead the UAE’s fuel and convenience market, supported
by our stable margins on retail fuel, the largest convenience store network in
the country, and a brand name strongly associated with national pride."
In-line with market regulations the current board of directors has completed its
term of service. During the AGM meeting, shareholders approved the appointment
of a new board of directors.
Adnoc Distribution’s domestic network expansion was supplemented in 2020 with
the execution of a definitive agreement to acquire 15 service stations in the
Kingdom of Saudi Arabia, which will add to the two stations opened there in
2018. These new stations are located in the eastern region, and will be
refurbished in line with Adnoc Distribution endorsed brand standards and offer
high quality fuel and retail services to customers.
A further two definitive agreements to acquire a total of 20 stations were also
announced in February 2021, which will bring its total network size to 37 and
further emphasizes the company’s commitment to growth in the Kingdom. All three
transactions are subject to certain conditions being met, including regulatory
approvals.
Al Jaber also highlighted Adnoc Distribution’s focus on upgrading its
convenience offering and the overall customer experience in 2020 to meet the
changing needs and trends due to Covid-19 by accelerating the Company’s digital
transformation strategy, adopting and promoting contactless methods of payment,
including through the Adnoc Distribution mobile app. The Company also introduced
online delivery service for retail convenience, with UAE door-to-door delivery
from more than 100 Adnoc Oasis stores available through Talabat and Carriage; in
addition to expanding its existing fuel and LPG delivery services.
"Supporting our nation is inherent in all we do, which 2020 has proven more than
most. During 2020, Adnoc Distribution continued its commitment to In-Country
Value and increased investment in local suppliers, an aspect we will endeavor to
build on during the year ahead," he continued.
Furthermore, the company’s attractiveness to investors was highlighted through
Adnoc’s placement to institutional investors on the Abu Dhabi Securities
Exchange (ADX), a significant milestone. A total of 1.25 billion shares, valued
at $1 billion, was the largest block placement of a publicly listed GCC company
and leverages on significant investor demand for Adnoc Distribution shares,
driven by its attractive value proposition. Doubling of free float to 20 per
cent also marked the broadening of the Company’s shareholder base, allowing for
greater liquidity of its shares on the Abu Dhabi Securities Exchange.
Al Jaber touched upon Adnoc Distribution’s investment case in his speech and
said: "Today, Adnoc Distribution shares offer a unique value proposition to
shareholders and investors with a combination of low exposure to oil price
volatility, predictable and healthy cash flows, strong growth potential and an
attractive dividend policy that offers high payback visibility."
In this context, Adnoc Distribution recorded unprecedented financial results in
2020 which reflected its strong operational performance and resilience. Net
profit grew by 9.7 per cent to Dh2.4 billion, or Dh0.195 per share, and
underlying earnings before interest, tax, depreciation and amortisation (EBITDA)
increased by 31.6 per cent to Dh 3.62 billion.
Al Jaber added: "As we begin to move out of the pandemic’s shadow and continue
our proactive efforts to combat the threat of Covid-19, I feel confident that
the hard work and dedicated efforts of our team will continue to build on our
achievements, and unlock new opportunities for growth, as we shape the success
of our future."
Ahmed Al Shamsi, acting chief executive officer, Adnoc Distribution, said: "We
are proud of our achievements during 2020. We demonstrated a strong ability to
navigate the challenges that were posed by the unprecedented circumstances that
we have all faced amid the Covid-19 pandemic.
Our success is very much thanks to the hard work and dedication of our employees
who are our biggest assets, as well as to our resilient business model, which
allowed us to adapt to the fast changing variables and the evolving customer
needs. We stayed true to our commitment by serving the community to ensure that
we continue to fuel the nation’s most vital lifelines during the time of crisis
and we lived up to the promises we made to our shareholders, whether through
delivering on our smart growth strategy, or by offering them a unique and
attractive value proposition model with a high level of visibility on future
returns. Adnoc Distribution is well placed to continue building on recent
success, in the UAE and beyond, in the year ahead and remains on track to reach
EBITDA target of at least $1.0 billion by 2023."
|