By Christian Moess Laursen


Adnoc Gas, one of the world's biggest natural-gas producers, booked a higher-than-expected net income for the second quarter, and said it plans to ramp up investments in growth projects in coming years.

The Abu Dhabi-owned gas company on Monday reported a 21% rise in net profit to $1.19 billion for the quarter compared with the same period last year as prices for liquefied petroleum-gas and naphtha--a hydrocarbon mixture used in laundry soap and cleaning fluids--offset weak liquefied natural-gas prices.

Analysts had expected $1.16 billion, according to a consensus polled by FactSet.

The company--which has a market valuation around $60 billion--plans to speed up its growth projects in the coming years, making use of its strong, low-leverage balance sheet, Chief Financial Officer Peter van Driel said in an interview.

"In the coming years [we] will step up [our] investments in more growth projects, and then [we're] going to leverage up," Van Driel said, adding that the company has around $4 billion earmarked for investments in growth projects.

One of its projects under development is the Ruwais LNG project which is set to more-than double the United Arab Emirates' export capacity as the country pushes into global markets. Last month, European energy giants Shell, BP and TotalEnergies--along Japan's Mitsui--signed deals to invest in the project, each taking a 10% stake.

In Monday's release, Adnoc Gas said it plans to acquire the project, which was greenlighted in June, from its parent Adnoc group. This could either happen soon, or after commission in 2028, Van Driel said.

"The answer depends very much on our strategic intends for the coming years," he said. It might be most beneficial for Adnoc Gas to wait to make the most of its balance sheet, he said, adding that the company will provide clarity to the market soon. Adnoc Gas will be operating the project either way.

In the quarter, revenue grew 13% to $6.08 billion, driven by the favorable prices, strong demand in domestic sales and a 1% increase in production volumes.

Earnings before interest, taxes, depreciation and amortization from domestic gas as well as exports were notably higher, benefiting from the higher prices and increased sales volumes. This drove an 18% jump in quarterly Ebitda to $2.09 billion, which beat a market consensus of $1.96 billion.

Adnoc Gas--which supplies around 60% of the Emirates' gas supply--said domestic sales benefited from increased population and industrial growth in the country.

It kept is margin on earnings before interest, taxes, depreciation and amortization stable at 34%, in line with its full-year target.

Meanwhile, it narrowed its domestic sales guidance for the year to between 2,240 trillion to 2,280 trillion British thermal units due to planned shutdowns in the fourth quarter. Adnoc Gas tends to schedule its shutdown activity during winter months due to seasonally lower prices.

It now expects total sales volumes to be between 3,420 trillion and 3,500 trillion BTU in 2024. Last year it logged total sales volumes of 3,540 trillion BTU.

The company--which became the largest-ever listing on the Abu Dhabi stock exchange last year--reiterated its dividend guidance of a 5% yearly rise to 2027 and declared a payout of $1.706 billion for the half-year. It plans to declare another payout of the same amount for the second half of the year.


Write to Christian Moess Laursen at christian.moess@wsj.com


(END) Dow Jones Newswires

08-12-24 0612ET