Abu Dhabi National Oil Company for Distribution (ADNOCDIST) Q2 2024 earnings summary

Executive summary

• Achieved double-digit growth in EBITDA and net profit in Q2 and H1 2024, with strong cash flow generation, record fuel volumes, and robust non-fuel retail performance across UAE, KSA, and Egypt, supported by network expansion and digital initiatives.

• Non-fuel retail business delivered double-digit gross profit growth, driven by upscaling convenience stores, car wash, and property management, with a conversion rate exceeding 26%.

• Strategic focus on expanding non-fuel offerings, future-proofing with EV charging infrastructure, leveraging AI for operational efficiency, and advancing ESG and sustainability initiatives.

• Total shareholder return since IPO reached $7.0 billion (+85%), with a robust 5-year ROCE over 25%.

• Dividend policy targets $700 million annually or at least 75% of net profit, providing payback visibility and upside for shareholders, with a 6.0% yield.

Financial highlights

• Q2 2024 EBITDA up 15% year-on-year to $267 million; H1 2024 EBITDA up 16.2% to $515 million.

• Q2 2024 net profit increased 12.9% to $170 million; adjusted net profit up 24.5% to $187 million; H1 2024 net profit up 7.7% to $319 million.

• Q2 2024 revenue rose 8% year-over-year to $2.39 billion; H1 2024 revenue up 8.7% to $4.77 billion.

• H1 2024 free cash flow reached $488 million, a 47% increase year-on-year; Q2 2024 free cash flow was $330 million, up 596% year-on-year.

• Retail fuel gross profit up 10% year-on-year; non-fuel retail gross profit up 13.5% in Q2 2024; convenience store gross profit up 14%.

Outlook and guidance

• On track to add 15-20 new stations and 150-200 fast/super-fast EV charging points in 2024, with 10 new stations and over 100 charging points added in H1.

• CapEx expected between $250 million and $300 million in 2024, focused on sustainable growth, EV infrastructure, and value-accretive opportunities.

• Dividend of $350 million for H1 2024 to be paid in October, fully covered by H1 cash flow.

• Continued focus on international expansion, both organic and inorganic, with strong balance sheet to support M&A.

• Egypt expected to contribute about 6% of EBITDA, with aviation and lubricants as key drivers.