Adnoc Distribution has revealed that its board of directors has green-lit an interim dividend amounting to $350 million (Dh1.285 billion) for the initial six months of 2024, which translates to 10.285 fils per share. The cut-off date for acquiring shares to be eligible for this interim dividend payout is set for September 26, 2024, with eligibility determined by shareholders listed in the share register as of September 30, 2024.
This H1 dividend constitutes the initial payment of the anticipated full-year 2024 dividend, which is projected to total $700 million (Dh2.57 billion), or 20.57 fils per share. This aligns with Adnoc Distribution's five-year dividend strategy, which stipulates an annual dividend of $700 million or a minimum of 75% of net profits, whichever is greater, from 2024 to 2028, contingent upon board approval and shareholder consent. The second and concluding dividend for 2024 is slated for payment in April 2025, subject to board endorsement and shareholder approval. Based on the share price of Dh3.67 as of September 20, 2024, the full-year 2024 dividend would yield an annual dividend rate of 5.6%.
The dividend strategy offers long-term clarity on anticipated shareholder returns and potential benefits from future earnings growth, solidifying Adnoc Distribution's dedication to consistent shareholder value enhancement. Eng. Bader Saeed Al Lamki, CEO of Adnoc Distribution, stated: “Adnoc Distribution has showcased remarkable performance in H1 2024, fueled by robust financial outcomes and optimism in future growth. The effective implementation of our strategic growth plan reinforces the Company's compelling value proposition, while our sound balance sheet and strong cash flow support future growth and shareholder returns.”
During the first half of 2024, Adnoc Distribution recorded a 16% year-over-year (YoY) surge in earnings before interest, taxes, depreciation, and amortization (Ebitda) to $515 million (Dh1.89 billion) and a 7.7% YoY increase in net profit to $319 million (Dh1.17 billion), driven by higher fuel sales, augmented contributions from international operations, and growth in the non-fuel retail sector. The company generated free cash flow of $488 million (Dh1.79 billion) in H1 2024, comfortably surpassing the interim dividend of $350 million (Dh1.285 billion). As of June 30, 2024, Adnoc Distribution maintained a robust financial stance with a net debt-to-Ebitda ratio of 0.53x and liquidity of $1.7 billion (Dh6.2 billion), including a cash balance of $925 million (Dh3.4 billion), positioning it favorably for future growth and shareholder value creation.
Since its IPO in 2017, Adnoc Distribution has consistently delivered substantial returns to shareholders through increased market value and regular dividends. By the time of the H1 2024 dividend, it will have disbursed a total of $4.4 billion (Dh16.2 billion) in dividends since the IPO. With an Ebitda record of $1 billion (Dh3.68 billion) in 2023, the company is on course to fulfill its growth commitments and is well-prepared for its next phase of strategic and accelerated growth.
In addition to the dividend strategy, Adnoc Distribution introduced a new five-year growth plan earlier this year, concentrating on domestic expansion, international platforms, business future-proofing, digital capability enhancement, and operational efficiency improvement. This strategy aims to position the Company for sustained growth while continuing to deliver shareholder value. “Our new strategy empowers us to seize new market opportunities both domestically and internationally, reinforcing our leadership and creating long-term value to sustain shareholder returns,” added Al Lamki.
Adnoc Distribution remains dedicated to exploring growth prospects in fuel and non-fuel retail, as well as new revenue streams arising from the energy transition. The Company is eager to expand its new mobility solutions, including Electric Vehicle (EV) charging, while maintaining a strong emphasis on sustainability-driven initiatives. As part of its efforts to future-proof its business, the Company focuses on growth and sustainability, rooted in its primary objective of delivering long-term sustainable value to shareholders.
