ADNOC Gas has unveiled its financial results for the first quarter of 2024, showcasing significant improvements in key financial metrics. The company’s adjusted net income surged by 21 percent year-on-year (Y-o-Y) to AED4.36 billion ($1.187 billion), while its domestic gas net income unit margin witnessed a robust 20 percent Y-o-Y growth.
As a prominent player in the UAE’s gas sector, ADNOC Gas plays a pivotal role in meeting over 60 percent of the nation’s gas demand and acts as the primary supplier to the petrochemical industry. In Q1 2024, the company demonstrated strong performance, with revenues climbing by 15 percent Y-o-Y to AED22.07 billion ($6.011 billion), driven by increased domestic demand. Overall sales volumes experienced a notable 14 percent Y-o-Y increase.
Buoyed by enhanced revenue and a persistent focus on operational efficiency, ADNOC Gas recorded a substantial growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q1 2024, reaching AED7.6 billion ($2.076 billion), marking a 17 percent Y-o-Y uptick. Additionally, the EBITDA margin improved from 34 percent to 35 percent compared to the previous year, underscoring the benefits of the company’s extensive 25-year gas supply and purchase agreement.
Dr. Ahmed Alebri, CEO of ADNOC Gas, emphasized the high cash conversion rate, with free cash flow generation soaring by 47 percent Y-o-Y to $1.183 billion. This robust cash flow will bolster a 5 percent increase in the annual dividend to $3.41 billion in 2024, aligning with ADNOC Gas’ dividend policy. Shareholders can anticipate an annual dividend yield exceeding 5 percent, along with potential share price appreciation, driven by the company’s financial performance and portfolio of growth initiatives.
Growth opportunities, dividend distribution
ADNOC Gas is poised to invest over $13 billion in domestic and international growth prospects from 2024 to 2028, targeting up to a 40 percent surge in EBITDA. The company remains steadfast in its pursuit of operational excellence, evident in its impressive average reliability rate of 99.4 percent across its facilities in Q1 2024, surpassing the 99.1 percent average in 2023.
During the recent Annual General Meeting (AGM), ADNOC Gas’ Board of Directors sanctioned the distribution of a full-year 2023 dividend totaling $3.25 billion. This encompassed an inaugural interim cash dividend of $1.625 billion disbursed in December 2023, with the remaining $1.625 billion distributed on April 26, 2024.
