Abu Dhabi National Oil for Distribution : ADNOC Distribution Q1 2024 Financial Statements – English – 9 May 2024

Reviewreportand interimfinancial information

For the three-month period ended 31 March 2024

ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Review report and interim financial information for the three-month period ended 31 March 2024

Director's report	3
Report on review of interim financial information	4
Interim condensed consolidated statement of financial position	5
Interim condensed consolidated statement of profit or loss	6
Interim condensed consolidated statement of comprehensive income	7
Interim condensed consolidated statement of changes in equity	8
Interim condensed consolidated statement of cash flows	9
Notes to the interim condensed consolidated financial statements	10-25

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ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Directors' report

for the three-month period ended 31 March 2024

The Directors present their report together with the interim financial information of Abu Dhabi National Oil Company for Distribution PJSC (the "Company") and its subsidiaries (collectively referred to as "the Group") for the three-month period ended 31 March 2024.

Principal activities

The principal activities of the Group are the marketing of petroleum products, compressed natural gas and ancillary products.

Review of business

During the period, the Group reported revenue of AED 8,749,736 thousand (31 March 2023: AED 7,998,430 thousand).

Profit for the period was AED 527,695 thousand (31 March 2023: AED 541,909 thousand).

The appropriation of the results for the period is follows:
	31 March 2024
	(unaudited)
	AED'000
Retained earnings as at 1 January 2024	1,971,140
Profit for the period	527,695
Dividends declared	(1,285,625)
Non-controlling interests	21,945
Retained earnings as at 31 March 2024	1,235,155

For the Board of Directors

Chairman

8 May 2024

Abu Dhabi, UAE

3

Grant Thornton Audit

and Accounting Limited

- Abu Dhabi

Office 1101, 11th Floor

Al Kamala Tower

Zayed the 1st Street

Khalidiya

Abu Dhabi, UAE

T [phone]

www.grantthornton.ae

REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION TO THE BOARD OF DIRECTORS OF

ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Introduction

We have reviewed the accompanying interim condensed consolidated statement of financial position of Abu Dhabi National Oil Company for Distribution PJSC ("ADNOC Distribution" or "the Company") and its subsidiaries (collectively referred to as "the Group") as at 31 March 2024 and the related interim condensed consolidated statement of profit or loss and the interim condensed consolidated statement of comprehensive income for the three-month period then ended and the interim condensed consolidated statement of changes in equity and the interim condensed consolidated statement of cash flow for the three-month period then ended and other related explanatory notes. Management is responsible for the preparation and presentation of this interim condensed consolidated financial information in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as issued by the International Accounting Standards Board (IASB). Our responsibility is to express a conclusion on this interim condensed consolidated financial information based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as issued by the IASB.

GRANT THORNTON UAE

Dr. Osama El-Bakry

Registration No. 935

Abu Dhabi, United Arab Emirates

8 May 2024

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ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Interim condensed consolidated statement of financial position as at 31 March 2024

	Note
Assets
Non-current assets
Property, plant and equipment	5
Right-of-use assets	10
Goodwill and intangible assets	6
Advances to contractors
Deferred tax assets
Other non-current assets
Total non-current assets
Current assets
Inventories	7
Trade receivables and other current assets	8
Due from related parties	9
Term deposits	11
Cash and bank balances	11
Total current assets
Total assets
Equity and liabilities
Equity
Share capital
Statutory reserve
Foreign currency translation reserve
Retained earnings
Equity attributable to owners of the Company
Non-controlling interests
Total equity
Non-current liabilities
Lease liabilities	10
Borrowings	12
Provision for decommissioning	14
Provision for employees' end of service benefit
Deferred tax liability
Other non-current liabilities
Total non-current liabilities
Current liabilities
Lease liabilities	10
Trade and other payables	13
Due to related parties	9

Total current liabilities

Total liabilities

Total equity and liabilities

31 March 2024			31 December 2023
(unaudited)			(audited)
AED'000			AED'000
7,162,500	7,189,661
1,768,614	1,778,418
1,016,799	1,053,811
57,781	38,466
11,822	2,166
12,866			15,551
10,030,382			10,078,073
1,417,262	1,294,423
3,474,897	3,519,413
919,884	805,558
200,225	200,225
3,394,890			2,993,937
9,407,158			8,813,556
19,437,540			18,891,629
1,000,000	1,000,000
503,921	503,921
(39,875)	(2,995)
1,235,155			1,971,140
2,699,201	3,472,066
264,942			323,767
2,964,143			3,795,833
1,551,923	1,564,251
5,491,698	5,492,280
152,002	149,362
196,144	192,271
132,704	134,962
8,583			10,671
7,533,054			7,543,797
187,549	183,013
3,780,987	2,541,355
4,971,807			4,827,631
8,940,343			7,551,999
16,473,397			15,095,796
19,437,540			18,891,629

To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim condensed consolidated financial statements present fairly in all material respects the consolidated financial position, financial performance and cash flows of the Group.

Wayne Beifus	Bader Saeed Al Lamki	Dr. Sultan Ahmed Al Jaber
Chief Financial Officer	Chief Executive Officer	Chairman of the Board of Directors

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

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ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Interim condensed consolidated statement of profit or loss

For the three-month period ended 31 March 2024

			3 months ended
			31 March 2024		31 March 2023
	Note	AED'000		AED'000
Revenue	15		8,749,736		7,998,430
Direct costs			(7,269,133)	(6,734,540)
Gross profit			1,480,603		1,263,890
Distribution and administrative expenses	16		(772,741)	(668,774)
Other income			44,605	48,655
Impairment losses and other operating expenses			(17,245)	(17,920)
Operating profit			735,222		625,851
Interest income			47,938	15,176
Finance costs			(209,163)	(94,787)
Profit for the period before tax			573,997		546,240
Income tax expense			(46,302)	(4,331)
Profit for the period			527,695		541,909
Attributable to:
Equity holders of the Company			549,640	537,321
Non-controlling interests			(21,945)	4,588
			527,695		541,909
Basic and diluted earnings per share	17		0.044		0.043

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

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ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Interim condensed consolidated statement of comprehensive income

For the three-month period ended 31 March 2024

		3 months ended
		31 March 2024		31 March 2023
		AED'000		AED'000
Profit for the period	527,695	541,909
Items that may be reclassified to profit or loss in subsequent periods
Exchange differences on translation of foreign operations	(73,760)		(3,824)
Other comprehensive loss for the period	(73,760)		(3,824)
Total comprehensive income for the period	453,935	538,085
Attributable to:
Equity holders of the Company	512,760	535,409
Non-controlling interests	(58,825)	2,676
		453,935		538,085

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

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ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Interim condensed consolidated statement of changes in equity

For the three-month period ended 31 March 2024

									Equity
					Foreign				attributable
					currency				to equity		Non-
	Share		Statutory		translatio		Retained		holders of		controlling
	capital		reserve		n reserve		earnings		the parent		interest		Total Equity
	AED'000		AED'000		AED'000		AED'000		AED'000		AED'000		AED'000
Balance as at 1 January 2023 (audited)	1,000,000	500,000	-	1,944,890	3,444,890	-	3,444,890
Profit for the period	-	-	-	537,321	537,321	4,588	541,909
Other comprehensive loss for the period	-	-	(1,912)	-	(1,912)	(1,912)	(3,824)
Dividends declared (note 23)	-	-	-	(1,285,625)	(1,285,625)	-	(1,285,625)
Acquisition of a subsidiary	-		-		-		-		-		95,921		95,921
Balance as at 31 March 2023 (unaudited)	1,000,000		500,000		(1,912)		1,196,586		2,694,674		98,597		2,793,271

Balance as at 1 January 2024 (audited)	1,000,000				503,921				(2,995)			1,971,140		3,472,066			323,767
Profit for the period	-				-											(21,945)
						-			549,640		549,640
Other comprehensive loss for the period	-				-											(36,880)
						(36,880)			-		(36,880)
Dividends declared (note 23)	-				-				-
								(1,285,625)		(1,285,625)			-
Balance as at 31 March 2024 (unaudited)		1,000,000				503,921				(39,875)			1,235,155		2,699,201			264,942

3,795,833

527,695

(73,760)

(1,285,625)

2,964,143

The accompanying notes form an integral part of these interim condensed consolidated financial statements.

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ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Interim condensed consolidated statement of cash flow

For the three-month period ended 31 March 2024

		3 months ended
		31 March 2024		31 March 2023
		AED'000		AED'000
Cash flows from operating activities
Profit for the period before tax	573,997	546,240
Adjustments for:
Depreciation of property, plant and equipment	130,481	118,715
Depreciation of right-of-use assets	35,618	29,618
Amortization of intangible assets	11,274	1,884
Impairment losses on receivables	15,443	6,507
Recoveries on receivables	(2,827)	(2,283)
Employees' end of service benefit charge	8,239	9,185
Inventories written-off	1,086	-
(Gain)/loss on disposal of property, plant and equipment	(17,055)	786
Finance costs	209,163	101,045
Interest income	(47,938)	(15,176)
Operating cash flows before movements in working capital	917,481	796,521
Increase in inventories	(121,753)	(54,333)
Decrease/(increase) in trade receivables and other current assets	57,132	(145,137)
(Increase)/decrease in due from related parties	(114,326)	33,967
(Decrease)/increase in trade and other payables	(13,534)	15,854
Increase in due to related parties	144,176	616,354
Cash generated from operating activities	869,176	1,263,226
Payment of employees' end of service benefit	(4,366)	(6,214)
Net cash generated from operating activities	864,810	1,257,012
Cash flows from investing activities
Payments for purchases of property, plant and equipment	(273,324)	(198,249)
Payments for advances to contractors	(27,615)	(12,620)
Proceeds from disposal of property, plant and equipment	17,273	1,726
Interest received	47,938	15,176
Payments for acquisition of subsidiary, net of cash acquired	-	(542,755)
Net cash used in investing activities	(235,728)	(736,722)
Cash flows from financing activities
Payment of lease liabilities	(54,707)	(43,054)
Proceeds from borrowings	-	230
Repayment of borrowings	(478)	-
Dividends paid	-	(1,285,625)
Finance cost paid	(78,640)	(53,220)
Net cash used in financing activities	(133,825)	(1,381,669)
Net increase / (decrease) in cash and cash equivalents	495,257	(861,379)
Cash and cash equivalents at the beginning of the period	2,993,937	2,617,099
Effect of foreign exchange rate changes	(94,304)	(3,428)
Cash and cash equivalents at the end of the period		3,394,890	1,752,292
Non-cash transactions
Accruals for property, plant and equipment	509,379		388,115
Advances to contractors transferred to property, plant and equipment	8,300		8,641
Additions to right of use assets for land leases		109,113		275,374

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ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Notes to the interim condensed consolidated financial statements for the three-month period ended 31 March 2024

1. General information

Abu Dhabi National Oil Company for Distribution PJSC ("ADNOC Distribution" or the "Company"), formerly Abu Dhabi National Oil Company for Distribution, is a company incorporated by Law No. 13 of 1973 issued by His Highness the Acting Ruler of the Emirate of Abu Dhabi.

On 22 November 2017, Law No. 15 of 2017 (the "New Law of Establishment") was issued replacing Law No. 13 of 1973 in respect of the incorporation of Abu Dhabi National Oil Company for Distribution PJSC, a public joint stock company registered with the commercial register in Abu Dhabi under commercial licence number CN-1002757 issued by Abu Dhabi Department of Economic Development. The Articles of Association of the Company became effective as of 22 November 2017, at the same time that the New Law of Establishment was issued and became effective. The duration of the Company is 100 Gregorian years commencing on the date of issuance of the New Law of Establishment.

The head office of the Company and ADNOC Distribution Global Company L.L.C. ("ADGC LLC") are registered at P.O. Box 4188, Abu Dhabi, United Arab Emirates. The Company, ADGC LLC and its subsidiaries are collectively referred to as the "Group". The Company's shares are listed on the Abu Dhabi Securities Exchange.

The principal activities of the Group are the marketing of petroleum products, natural gas and ancillary products. The Group owns retail fuel stations in the United Arab Emirates (UAE), the Arab Republic of Egypt and the Kingdom of Saudi Arabia.

The Group is a marketer and distributor of fuels and lubricants to corporate and government customers throughout the UAE. In addition, the Group provides refueling and related services at eight airports in the UAE and provides a compressed natural gas distribution network in Abu Dhabi. The Group also exports its proprietary Voyager lubricants to distributors in various countries, across the GCC, Africa and Asia. The Group operates "ADNOC Oasis" convenience stores at a majority of its service stations, and leases retail and other space to tenants, such as quick service restaurants.

The Group also performs marketing activities and the distribution of petroleum products, motor oils, fuels and specialties in Egypt. In addition, it is also involved in constructing, owning and operating cafeterias through service stations in Egypt.

2. Application of new and revised International Financial Reporting Standards (IFRS)

The following new and revised IFRSs, which became effective for annual periods beginning on or after 1 January 2024, have been applied in these interim condensed consolidated financial statements:

• Amendment to IFRS 16 - Leases on sale and leaseback
  These amendments include requirements for sale and leaseback transactions in IFRS 16 to explain how an entity accounts for a sale and leaseback after the date of the transaction. Sale and leaseback transactions where some or all the lease payments are variable lease payments that do not depend on an index or rate are most likely to be impacted.
• Amendment to IAS 1 - Non-current liabilities with covenants
  These amendments clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments also aim to improve information an entity provides related to liabilities subject to these conditions.
• Amendment to IAS 7 and IFRS 7 - Supplier finance
  These amendments require disclosures to enhance the transparency of supplier finance arrangements and their effects on an entity's liabilities, cash flows and exposure to liquidity risk. The disclosure requirements are the IASB's response to investors' concerns that some companies' supplier finance arrangements are not sufficiently visible, hindering investors' analysis.

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