Petrotahlil-Shareholders of Adnoc Distribution, the UAE’s largest fuel and convenience retailer, on Thursday approved a significant increase in dividends.
Under the new policy, the company said it will increase its annual dividend payment, starting in 2019, in recognition of the a strong financial performance and cash position in 2018, as well as its confidence in future prospects.
It said it will award an annual dividend for fiscal year 2019 of AED2.39 billion ($650 million), a 63 percent increase compared to 2018.
It added that an annual dividend for fiscal year 2020 of AED2.57 billion will be awarded with a minimum payout of 75 percent of distributable profits from 2021 onwards.
Adnoc Distribution said the new policy reflects the shareholders’ trust in the company, following its robust financial performance in 2018, when it reported AED2.1 billion in net profit, an increase of 18 percent from 2017.
Shareholders also approved a second and final dividend payment of AED735 million for the year ended December 31 2018 on top of an initial AED735 million dividend payment for the year, which was paid in October.
Dr Sultan Ahmed Al Jaber, Adnoc Distribution’s chairman, said: “The new dividend policy approved today demonstrates our commitment to our shareholders and our confidence in the company’s future prospects and growth strategy. As we expand the Adnoc Distribution business, we will continue to look at both organic and inorganic growth options to deliver ambitious, but disciplined growth that delivers attractive returns.”
During 2018, the company opened 17 new service stations in the UAE, including the company’s first three locations in Dubai and also opened itss first two service stations in Saudi Arabia
Saeed Mubarak Al Rashdi, Adnoc Distribution’s acting CEO, said: “Our balance sheet is strong, and we continue to generate significant cash flow. We have an extremely compelling investment proposition that we expect to continue into 2019 and beyond.”