ADNOC Gas Achieves 21% Increase In Adjusted Net Income In First Quarter Of 2024

In a significant announcement today, ADNOC Gas plc revealed its financial outcomes for the first quarter of 2024, marking a notable year-on-year growth. The company's adjusted net income saw a 21% increase, reaching $1,187 million, while its domestic gas net income unit margin rose by 20%. This performance underscores ADNOC Gas' efficiency and its pivotal role in meeting over 60% of the UAE's gas demand, particularly as the primary supplier to the nation's petrochemical sector.

Driven by a surge in demand within the UAE, ADNOC Gas reported a 15% increase in revenues for Q1 2024, amounting to $6,011 million. This rise in sales volume by 14% year-on-year has significantly contributed to the company's financial health. Furthermore, the earnings before interest, taxes, depreciation, and amortisation (EBITDA) escalated to $2,076 million, up by 17% from the previous year, with an EBITDA margin improvement to 35%.

Dr. Ahmed Alebri, Chief Executive Officer of ADNOC Gas, highlighted the company's robust sales volumes and margin improvements in core domestic operations as key drivers behind the 21% increase in adjusted net income. "Our strategic growth projects are advancing well," Dr. Alebri noted, mentioning the signing of additional LNG sales agreements that bolster ADNOC Gas' global supplier status.

The company's strong financial performance is also evident in its free cash flow generation, which has increased by 47% year-on-year to $1,183 million. This financial stability supports a 5% growth in the annual dividend for 2024 to $3.41 billion, aligning with the company's dividend policy and offering shareholders over a 5% annual dividend yield alongside potential share price appreciation.

ADNOC Gas is set to invest over $13 billion in growth opportunities both domestically and internationally between 2024 and 2028. This investment aims to enhance its EBITDA by up to 40%, leveraging ADNOC’s planned expansion of oil production capacity which is expected to boost associated gas production.

The company's international ambitions include acquiring new positions in the gas value chain across Europe, India, China, and South-East Asia. These efforts are designed to elevate the UAE’s standing in global Liquefied Natural Gas (LNG) markets and generate additional returns.

ADNOC Gas also reported an impressive average reliability rate of 99.4% across its facilities in Q1 2024. The period also saw significant progress with Ruwais LNG, including a pivotal early Engineering, Procurement, and Construction (EPC) contract award and two long-term Heads of Agreements for LNG offtake from the facility.

With a focus on strategic growth projects, ADNOC Gas incurred $387 million in CAPEX during Q1 2024, up by 123% year-on-year. Additionally, a new 10-year LNG supply agreement was signed with GAIL India Limited for an annual supply of 0.5 million metric tonnes of LNG.

At its recent Annual General Meeting (AGM), ADNOC Gas' Board of Directors approved a proposal to distribute a full-year 2023 dividend of $3.25 billion. This includes an inaugural interim cash dividend paid in December 2023 and the remaining amount disbursed on 26 April 2024.

This financial reporting period marks a significant phase for ADNOC Gas as it continues to strengthen its market position both locally and internationally while delivering substantial returns to its shareholders.

With inputs from WAM