ADNOC Distribution’s dividend largesse takes its ‘pay-out’ ratio to 141%

To give away 75 per cent distributable profits from FY22 onwards

ABU DHABI/September 30: The AED1.285 billion interim dividend approved by ADNOC Distribution board for the first half of the current year works out a handsome pay-out ratio of 141 per cent, which could be one of the best in the market.

As of  June 30, 2020, ADNOC Distribution held AED2.4 billion in cash and cash equivalents (including term deposits) and AED2.8 billion in its unutilised revolving credit facilities

ADNOC Distribution said in a statement that its board of directors has approved AED1.285 billion Interim dividend payment for first six months of 2020 at the rate of 10.285 fils per share.

Given the fact that the company has reported a net income of only AED910 million for the same six-month-period, it shows that the dividend pay-out ratio has worked out as high as 141.20 per cent.

Pay-out ratio or dividend pay-out ratio is the percentage of dividend payment in relation to the net income generated by the company for the said period.

ADNOC Distribution is UAE’s largest fuel and convenience retailer. This is the first dividend payment in what is expected to be a full-year 2020 dividend payment of AED 2.57 billion (AED 20.57 fils per share), reflecting a 7 per cent increase compared with last year’s dividend of AED 2.39 billion (19.10 fils per share).

New dividend policy

During its General Assembly meeting in March 2020, the company had announced an amendment to its dividend policy for 2021 onwards, setting an AED 2.57 billion dividend for 2021 and a dividend equal to at least 75 per cent of distributable profits from 2022 onwards, subject to the discretion of the Board of Directors and the approval of shareholders.

Ahmed Al Shamsi, Acting Chief Executive Officer of ADNOC Distribution, said that the company’s progressive dividend policy demonstrates its commitment to the shareholders.

“With our resilient business model offering stable and predictable cash flows and low exposure to oil price volatility, we are confident in our ability to pay a generous dividend to our shareholders, while also maintaining significant capacity to deploy capital through a disciplined investment strategy,” Al Shamsi added

The company has accelerated delivering on its strategic smart growth plans by opening 37 new stations in the UAE, as at end of September 2020, a seven times increase in new station openings when compared with last year, and remains on-track to deliver 50-60 new stations by full year 2020, including 20-25 new stations in Dubai.


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