ADNOC Distribution announced that its Board of Directors has approved an interim dividend payment of $350 million to shareholders for the first six months (H1) of 2021.
This is the first payment in what is expected to be a full-year 2021 dividend payment of $700 million, consistent with the company’s dividend policy.
This would translate to a 4.9 percent annual dividend yield for 2021. As per the company’s approved policy, the second and final dividend for 2021 is expected to be paid in April 2022, subject to the Board of Directors’ recommendation and shareholders’ approval.
Since its initial public offering, the company has steadily increased its cash payback to shareholders, with dividends of $400 million in 2018, $651 million in 2019, and $700 million in 2020. During its General Assembly meeting in March 2021, the company set a minimum dividend payout of $700 million for 2022, compared to 75 percent of distributable profit as per the previous policy.
The revised dividend policy gives stockholders more certainty about when they will be paid until April 2023. Following that, the dividend policy remains unchanged, with a dividend equivalent to at least 75 percent of distributable profits. ADNOC Distribution expects to continue paying half of the annual dividend in October of the relevant year and the other half in April of the next year.
Bader Saeed Al Lamki CEO ADNOC Distribution
“With our resilient business model, we are confident in our ability to pay an attractive dividend to our shareholders, while also maintaining a significant capacity to deploy capital through a disciplined investment strategy, aimed at continuing our efforts to expand our fuel station network, as well as investing in our non-fuel and international business expansion.”
ADNOC Distribution had a robust balance sheet as of 30 June 2021, with $1.06 billion in cash and cash equivalents, $762 million in unutilized revolving credit lines, $543 million in retained earnings, and net debt to EBITDA of 0.46x. The company showed solid business resilience in the first half of 2021, achieving strong financial results with an EBITDA of $416 million and a Net Profit of $313 million and enhanced operational efficiencies.
In H1 2021, the company continued to execute its smart expansion strategy, with opening 12 new service stations in the UAE, refurbishing 24 convenience stores in the UAE, and receiving no-objection certificates from Saudi Arabia’s General Authority for Competition to buy 35 stations.
Most recently, the company announced that FTSE Russell had included ADNOC Distribution in the FTSE Emerging Markets (EM) Index. The inclusion of ADNOC Distribution’s shares in these recognized indices is expected to boost their attractiveness to potential overseas investors, significantly expanding the company’s investor base.
