Adnoc Distribution, the leading fuel and convenience retailer in the UAE, has reported a strong first-quarter net profit increase of 13 percent year-on-year, reaching $165 million. The company’s earnings before interest, taxes, depreciation, and amortization (Ebitda) also saw an 18 percent growth to $248 million, showcasing progress in achieving its new five-year strategy. The growth was driven by momentum in both fuel and non-fuel retail segments, supported by over 20 Artificial Intelligence-driven initiatives aimed at enhancing growth and operational efficiencies.
The company’s non-fuel gross profit increased by 16 percent year-on-year to $55 million, indicating a strong balance sheet with a net debt-to-Ebitda ratio of 0.50 times. This reinforces Adnoc Distribution’s financial position, enabling investments in growth and delivering attractive shareholder returns. CEO Bader Saeed Al Lamki attributed the robust first-quarter results to the company’s strategic focus on domestic growth, international platforms, and future-proofing the business. The company aims to expand its network to 1,000 stations, increase EV charging points, grow non-fuel transactions, and expand convenience stores.
The integration of AI in operations has been a cornerstone of Adnoc Distribution’s strategy, yielding tangible results across various functions. For example, the innovative Fuel Demand AI Model has optimized fuel delivery, potentially preventing lost sales totaling over $27 million in a five-year period. In Q1 2024, the company opened 8 new service stations, expanding its total network to 846 stations, with plans to add between 15 and 20 new sites by the end of the year. Non-fuel retail business transactions increased by 7.0 percent across the UAE network.
Adnoc Distribution is focusing on capital allocation towards convenience and mobility, transforming its stations into preferred destinations in alignment with its growth strategy. The company has expanded its non-fuel offerings by introducing high-capacity car wash tunnels, with plans to launch more tunnels and upgrade existing facilities by the end of 2024. Additionally, the company aims to double the number of properties occupied by leading food and beverage brands across its network by the end of 2025, enhancing customer experience and driving revenue growth.
Overall, Adnoc Distribution’s strong financial performance in the first quarter of 2024 reflects its commitment to strategic growth initiatives and operational excellence. The company’s focus on leveraging AI, expanding its network, and enhancing non-fuel offerings demonstrates a proactive approach towards meeting evolving customer demands and future market opportunities. With a clear roadmap outlined in its five-year strategy, Adnoc Distribution is poised for continued success and sustainable growth in the UAE fuel and convenience retail sector.
