Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
ADNOC Distribution delivered record first-half results, with net profit rising 59% year-on-year to $568 million as the company advances its international expansion plans to drive future growth.
Speaking to Aletihad, Athmane Benzerroug, Chief Strategy, Transformation and Sustainability Officer at ADNOC Distribution, said: “The first half delivered record earnings and returns. These were the highest-ever first-half numbers in the company’s history.”
Gross profit increased 28.9% to $1.16 billion in the first half of 2026, while reported earnings before interest, taxes, depreciation and amortisation rose 38.8% to $786 million. Underlying EBITDA, which excludes inventory gains and other items, increased 13.9% to $603 million.
Benzerroug said the underlying EBITDA growth reflected the strength of the company’s core operations, while the overall results were supported by record sales volumes across its retail and commercial fuel businesses.
Fuel volumes reached a record 7.75 billion litres, an increase of about 1.6% from a year earlier. Retail fuel accounts for approximately 70% of the company’s total volumes.
Across the UAE, Saudi Arabia and Egypt, retail fuel volumes increased by 1%, while volumes in the UAE and Saudi Arabia rose by 1.7%, supported by network expansion, new stations added last year and initiatives aimed at increasing customer footfall.
Commercial fuel volumes increased by 3% across the three markets and by 3.7% in the UAE and Saudi Arabia.
ADNOC Distribution’s fuel retail network expanded 11% year-on-year to 1,045 service stations as of June 30. The network comprised 569 stations in the UAE, 231 in Saudi Arabia and 245 in Egypt.
The company is now seeking to use the businesses it has built in those three markets as a foundation for expansion into new countries, with the proposed acquisition of Shell’s downstream operations in South Africa representing the next step in that strategy.
ADNOC Distribution signed a definitive agreement in July to acquire the South African business at an implied enterprise value of $1 billion. Subject to regulatory approvals, the transaction is expected to be completed in 2027 and increase the company’s earnings per share by 6%.
Benzerroug said the South African business ranked third in the country by number of stations, with a network of 580 sites.
Fuel volumes sold per station are approximately 30% higher than those of competitors because many of the sites are located in major economic hubs, he said. The business also owns more than half of its stations, providing long-term visibility and flexibility to introduce additional assets and services.
ADNOC Distribution expects to generate between $30 million and $40 million in additional annual EBITDA from the South African business by the fifth year following completion of the acquisition.
“Through the proposed acquisition of Shell’s downstream business in South Africa, we are creating a scalable platform for global mobility and convenience,” Benzerroug said.
“This gives us access to new markets, new customers and new engines of growth.”
The company will continue to consider further acquisitions but will remain selective, he said.
ADNOC Distribution’s previous major acquisition was in 2023, when it acquired a 50% stake in TotalEnergies Egypt.
“When we find the right transaction, we will proceed. When we do not find the right opportunity, we will wait or reallocate the cash,” Benzerroug said.
ADNOC Distribution is increasing its focus on food and beverage services, private-label products, electric-vehicle charging, car-care services and community-focused destinations such as The Hub by ADNOC.
Non-fuel retail, which includes convenience stores, car washes, oil changes, vehicle inspections, property leasing and quick-service restaurants, accounts for approximately 15% of the company’s total gross profit, Benzerroug said.
Non-fuel retail gross profit reached $142 million in the first half of 2026, more than double the $67 million recorded in the corresponding period of 2021. It has grown at an annual rate of about 16% over the five-year period.
The company operated 387 Oasis by ADNOC convenience stores and 37 vehicle inspection centres in the UAE as of June 30.
While the company is expanding its electric-vehicle charging business, Benzerroug said conventional fuel would remain dominant in the UAE for at least the next 10 years.
The UAE vehicle fleet is growing by approximately 6% to 8% annually, while about 98% of vehicles currently on the road have internal-combustion engines, he said.
Fuel is also relatively inexpensive in the UAE compared with Europe and the US, while the higher purchase price and insurance costs of electric vehicles continue to affect the total cost of ownership.
“We have strong visibility that the fuel business and fuel volumes will continue to grow for at least the next 10 years,” Benzerroug said.
However, electric and hybrid vehicles are growing at double-digit rates, compared with single-digit growth for conventional vehicles, supporting the company’s investment in charging infrastructure.
ADNOC Distribution’s E2GO network expanded 35% year-on-year to 406 fast and superfast charging points during the first half. The volume of electricity sold increased 2.1 times compared with the corresponding period of 2025.
The board approved a second-quarter dividend of 5.14 fils per share, equivalent to $175 million, payable on September 1.
ADNOC Distribution’s dividend policy provides for an annual payment of $700 million or at least 75% of net profit, whichever is higher. Following the second-quarter payment, the company will have distributed an estimated $5.8 billion, or Dh21.5 billion, in dividends since its initial public offering.
