ADNOC Gas reported a 21% year-on-year surge in Q1 2024 net income to $1.18 billion, while its domestic gas net income unit margin improved by 20% during the same period.
ADNOC Gas’ revenues increased 15% year-on-year (Y-o-Y) to $6.01 billion, underpinned by a strong increase in demand in the UAE, which saw overall sales volumes increase by 14% year-on-year. The entity’s Q1 2024 earnings before interest, taxes, depreciation and amortisation (EBITDA) increased to $2.07 billion, a 17% year-on-year increase. EBITDA margin improved to 35% from 34% a year earlier, underscoring the benefits of our 25-year gas supply and purchase agreement.
“Our strong profitability was backed by a high cash conversion rate where our free cash flow generation was up 47% year-on-year to $1,183 million,” said Dr. Ahmed Alebri, CEO of ADNOC Gas. “Our robust cash flow generation will enable us to grow the annual dividend by 5% to $3.41 billion in 2024, in line with our dividend policy.”
“Thanks to ADNOC Gas’ strong financial performance and an exceptional portfolio of growth projects, our shareholders stand to continue to benefit from an annual dividend yield of over 5% in addition to the potential for share price appreciation.”
Looking ahead
The company plans to invest more than $13 billion in domestic and international growth opportunities between 2024 and 2028, with its predictable margin business expected to grow its EBITDA by up to 40%.
“ADNOC Gas is well-positioned to benefit from ADNOC’s planned expansion of oil production capacity to five million barrels per day by 2027, which will contribute to an increase in associated gas production,” it said in a statement on Tuesday.
The company seeks to grow internationally and acquire new positions in the gas value chain in Europe, India, China and Southeast Asia to enhance the UAE’s presence in international Liquefied Natural Gas (LNG) markets and generate an additional return that enhances its current business.
At the recent Annual General Meeting (AGM), the Board of Directors approved ADNOC Gas’ proposal to distribute a full-year 2023 dividend of $3.25 billion.