UAE’s largest fuel and convenience retailer, ADNOC Distribution has stated that its shareholders have approved a proposal to increase the company’s dividend by 7.5 percent for 2020 and to maintain a similar pay-out for the next two years.
As per the reports, investors have agreed to a $350 million (Dh1.285 billion) dividend for the second half of 2020, taking the overall dividend to $699 million (Dh2.57 billion), or $5.60 (20.57 fils per share), for the full year. And, they have agreed to pay out at least the same sum in 2021 and 2022, with dividends reverting to a minimum of 75 percent of distributable income in the following years.
The UAE fuel distributor further said that the dividend policy approved recognized the company’s “trust in its growth prospects and cash-flow generation potential” at the end of last year.
“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 revitalized 100 ADNOC Oasis convenience stores to offer a fresh and modern environment. 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.”
ADNOC Distribution raised the volume of free-floating shares on the Abu Dhabi Securities Exchange to 20 percent following a block placement of 1.25 billion shares priced at $1 billion with institutional investors, according to the reports.
The company’s shares offer “a combination of low exposure to oil price volatility, predictable and healthy cash flows, strong growth potential and an attractive dividend policy”, Dr. Al Jaber told shareholders at the meeting.
“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 [an earnings] target of at least $1 billion by 2023,” commented Ahmed Al Shamsi, Acting chief executive at ADNOC Distribution.