ADNOC Gas has released its financial results for the first quarter of 2024, showing significant improvement in key metrics. The company’s adjusted net income increased by 21 percent year-on-year (Y-o-Y) to AED4.36 billion ($1.187 billion), while its domestic gas net income unit margin saw a 20 percent Y-o-Y improvement.
ADNOC Gas is a major player in the UAE’s gas market, meeting over 60 percent of the country’s gas demand and serving as the primary supplier to the petrochemical sector. In Q1 2024, the company delivered strong results, with revenues rising by 15 percent Y-o-Y to AED22.07 billion ($6.011 billion), driven by increased demand within the UAE. Overall sales volumes grew by 14 percent Y-o-Y.
Backed by improved revenue and a continued focus on operational efficiency, ADNOC Gas saw its earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q1 2024 increase to AED7.6 billion ($2.076 billion), reflecting a 17 percent Y-o-Y growth. The EBITDA margin also improved from 34 percent to 35 percent compared to the previous year, highlighting the advantages of the company’s long-term gas supply and purchase agreement, which spans 25 years.
Dr. Ahmed Alebri, chief executive officer of ADNOC Gas, highlighted the high cash conversion rate, with free cash flow generation increasing by 47 percent Y-o-Y to $1.183 billion. This robust cash flow will support a 5 percent growth in the annual dividend to $3.41 billion in 2024, aligning with ADNOC Gas’ dividend policy. Shareholders can expect an annual dividend yield of over 5 percent and the potential for share price appreciation, thanks to the company’s financial performance and portfolio of growth projects.
Growth opportunities, dividend distribution
ADNOC Gas plans to invest more than $13 billion in domestic and international growth opportunities from 2024 to 2028, with the aim of achieving up to a 40 percent increase in EBITDA. The company remains committed to 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 approved the distribution of a full-year 2023 dividend amounting to $3.25 billion. This included an inaugural interim cash dividend of $1.625 billion paid in December 2023, with the remaining $1.625 billion distributed on April 26, 2024.
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