ADNOC Distribution earned a record quarter selling almost no extra fuel

Nagham Hassan, Market Analyst, etoro

Abu Dhabi, United Arab Emirates – August 17, 2026: Anyone who filled a fuel tank in the UAE this spring saw pump prices rise. ADNOC Distribution, which runs just over 1,000 fuel stations across the UAE, Saudi Arabia and Egypt, has now reported what that did to its accounts.

Second quarter net profit attributable to shareholders reached AED 1.32 billion, nearly double the figure from a year earlier and 70% above the first quarter. Revenue rose 52.8% to AED 13.2 billion.

Nagham Hassan, Market Analyst at etoro, explains that what sits underneath that growth is more interesting than the size of it. The company sold about 1% more fuel in total than a year ago while revenue rose more than half. Almost all of the increase came from charging more per litre, not from selling more litres. Retail volumes in the UAE and Saudi Arabia fell 2.6% against the same quarter last year.

The second quarter profit boost came from a timing effect on stored fuel. The company buys fuel wholesale, stores it in tanks, and sells it at current pump prices. When retail prices rise, fuel bought earlier at lower costs is sold at higher rates, creating a temporary profit gain.

Filings record this inventory gain at AED 738 million for the second quarter, against reported EBITDA of AED 1.76. By comparison, the first quarter produced an inventory gain of around AED 24 million. The year-over-year swing in inventory gains reached AED 701 million, which accounts for more than the total AED 638 million increase in net profit.

Stripping out inventory movements and one-off items reveals the company's underlying EBITDA at AED 1.09 billion. This underlying measure grew 5.0% compared to last year, but dropped 2.5% compared to the first quarter, when underlying growth was running at 24%.

The company also opened stations faster than it sold fuel. The network grew more than 11% over the past year while average sales per site fell 11.9%. Aviation is the other oddity. Second quarter volumes jumped 64.2% year on year to 205 million litres while the segment's gross profit fell 11.7% over the same three months, even though it rose 15.9% across the half year. The filings do not explain the gap.

The market had started repricing the stock months earlier. ADNOC Distribution slid around 12% from the start of January to a low in mid-March, then recovered steadily in the months since. It now trades in the 4 dirham range, roughly 18% above that March low and back above where it started the year. The market appears to have treated the higher oil price as a positive and priced it in gradually, well before the 5 August results confirmed it.

The company gave no earnings guidance. It reaffirmed 60 to 70 new stations this year and capital spending of $250 to $300 million, of which most is still to come. The quarterly dividend of 5.14 fils was maintained, with the policy extended to 2030, and a roughly $1 billion agreement to buy Shell's South African downstream business is expected to close in 2027 and to add around 6% to earnings per share in its first full year.

Where it goes from here depends largely on oil prices. Higher pump prices worked both ways this quarter, lifting profit while costing the company some sales. Where that nets out depends on where crude settles, which has been hard to call all year.