Adnoc Distribution, the UAE’s biggest fuel and convenience retailer, is actively seeking acquisitons to expand with a $200 million capital expenditure programme even as third-quarter net profit surged 55 per cent, boosted by revenues and a decline in expenditures. "Our maintenance capex for the business is in the region of $50 to $60m and then for capex this year we have given an indication of $210m, which we would spend and we also have significant cash that we believe we can make some outstanding acquisitions on. With the $200m we believe we can make the right acquisitions," said Adnoc deputy chief executive John Carey. The company said net profit for the period to the end of September rose to Dh558m from the year earlier period, according to an e-mailed statement. Revenue rose about 24 per cent to Dh5.96 billion in the third quarter compared to the same a year ago. Capital expenditures plunged 78 per cent in the quarter. The decline in capex year-on-year was largely due to the "abnormally high capex last year" from the acquisition of terminal assets, particularly from Adnoc's Takreer facilities. The company, which floated 10 per cent of its shares in December last year, has sufficient cash flow to focus on acquisition both in the UAE and internationally. "The positive side of the results is the generation of cash within the UAE for expansion in our retail business. the investment we're putting into our convenience stores. So that's one area, another key area we're also investing is technology, to service the way we interact with our customers, so really making sure we have the right infrastructure base to deliver better customer service," said Mr Carey. Adnoc Distribution is hunting acquisitions abroad both in its fuel retail as well as its lubricants business, he added without offering more specific details. "It's the same concept, we're in the downstream business and retail fuel, and fuel and non-fuel in terms of convenience, and we will continue to focus on those areas that we believe adds to our customer proposition. We would stick to what we're good at, we won't go into something we have no experience in," said Mr Carey. The company is on track to deliver three service stations in Dubai "in the next few weeks" and is having "good conversations" with partners to enter the Saudi market, where fellow fuel retailer Enoc is also in expansion mode, focusing on delivering 15 service stations by year-end. _______________ Read More: Adnoc puts Ruwais at the heart of plans for UAE's future beyond oil Self-service trial at Abu Dhabi petrol stations extended beyond Ramadan _______________ Mr Carey is unperturbed by growing competition within the Saudi retail fuel business, which has opened up to foreign investment, saying: "The number of service stations in the Saudi market is huge. I don't believe 10, 20, 30 stations is material in terms of market size [which is] three times the size of the UAE." Net profit for the first nine months of the year climbed 28 per cent to Dh1.68 billion from the same period a year earlier. Revenue in the period increased 19 per cent to Dh 16.9bn. Capital expenditures in the period dropped 61 per cent. Adnoc Distribution, which last December floated 10 per cent of its shares in the first initial public offering on the Abu Dhabi stock exchange in six years, holds a virtual monopoly in Sharjah and Abu Dhabi. As part of that programme, the company reduced costs and expanded its service station footprint. "We continue to deliver on our strategy, delivering and sustaining robust financial results through our focus on operational excellence, innovation, and cost efficiency," said Saeed Mubarak Al Rashdi Adnoc Distribution acting chief executive. "We have made significant progress across all three pillars of our strategy – fuel, non-fuel and cost-efficiency initiatives. Listen: Business Extra Podcast Updated: November 15, 2018 06:39 PM
Adnoc Distribution, the United Arab Emirates' (UAE) leading fuel distributor, is actively seeking overseas acquisitions in its fuel retail and lubricants businesses. The company has $200m to spend, and is in discussions with partners to enter the competitive Saudi market. In a statement, Adnoc said it was "pleased that we have been able to secure this significant investment from one of our key strategic partners". In addition, Adnoc's Q3 capex fell 78%, due to the "abnormally high" capex of 2017.