Today and welcome to the ADNOC Distribution's Earnings Call for Q2 2025. Today's conference is being recorded. At this time, I would like to turn the conference over to Athmane Benzerroug. Please go ahead.
Good afternoon, ladies and gentlemen, and welcome to ADNOC Distribution H1 2025 Earnings Conference Call. I'm Athmane Benzerroug, Chief Strategy, Transformation, and Sustainability Officer. It's a pleasure to have you with us today. Joining me on the call, Bader Al Lamki, our Chief Executive Officer, and Ali Siddiqi, our Acting Chief Financial Officer. In today's call, our CEO will begin by highlighting our key achievements and sharing the company's outlook for the rest of the year. I will walk you through the progress we have made on executing our growth strategy. Following that, our Acting CFO will present the operating and financial results for H1 2025. After the presentation, we will open the floor for your questions. This presentation includes forward-looking statements relating to our business. Such statements involve a number of factors that could cause actual results to differ materially from our expectations.
For more information, please refer to the International Offering Memorandum relating to our IPO and to our other investor communications, all of which are available on our website. I will now hand over to Bader, who will highlight our key achievements and discuss the company's outlook.
Thank you, Athmane. Good morning, good afternoon, everyone. Let me begin with the HSE highlights. At ADNOC Distribution, safety is more than a priority. It is a core value that guides how we operate every day. In the first half of 2025, we achieved an outstanding safety record. This outcome reflects the strong safety culture we have built across the organization, driven by ownership at every level, continuous investment in our facilities, and focus on training. This commitment to excellence in health, safety, and environment enables us to operate and protect our people, our partners, and the communities we serve while delivering sustainable growth. Sustainability is embedded in everything we do. We are actively decarbonizing our operation and aligning our financing strategy with our sustainability goals. Our target is clear: a 25% reduction in carbon intensity by 2030.
To get there, we are executing a focused set of initiatives ranging from energy intensity optimization and installation of energy-efficient equipment to deploying solar panels and using biofuels in our supply fleet. We are seeing results. Our ESG performance continues to improve, with rating above the industry average from leading agencies including Sustainalysts, S&P Global, and FTSE. This is not just about compliance; it is about building a more resilient, future-ready business that creates long-term value to all shareholders. Let me now share the key highlights of ADNOC Distribution's equity story. We operate in a resilient and robust regulated framework with industry-leading margins and limited exposure to oil-price volatility. This translates into predictable, stable cash flow generation. A major strength is a five-year supply agreement with our supportive majority shareholder, ADNOC.
This contract protects us from inventory losses and allows us to benefit from inventory gains that flow directly to our bottom line, an important advantage in today's dynamic oil market. Since our IPO, we have more than doubled the shareholders' value, reflecting the strength of our business model and disciplined execution. Also, our five-year dividend policy provides long-term visibility of returns while offering upside potential for future earnings growth. Looking ahead, we focus on accelerating growth through five strategic pillars. Number one, investing in the highly profitable UAE market. Secondly, doubling down on non-fuel retail offering and transforming our service station to destinations of choice. Number three, leveraging digital and AI to grow revenues, optimize costs, and enhance customer experience. Number four, unlocking new revenue streams through energy transition with a focus on high-margin EV charging business. Finally, we are growing our international footprint and exploring accretive inorganic opportunities.
Together, these strategic pillars position ADNOC Distribution to deliver sustained growth and long-term value creation for our shareholders, as seen in our first half of 2025. Let's talk now about growth, and we have very good news to share. In the first half of this year, we delivered one of the strongest sets of results to date, clearly demonstrating that we are executing our strategy and delivering growth above market expectations. The EBITDA and net profit both increased at double-digit rates, driven by record-high H1 fuel volumes sold across our network. The core fuel vertical, retail and commercial, which together represent over 80% of our businesses, saw an 8% increase in gross profit. This was supported by strong volume growth on the retail fuel side and proactive margin management on the corporate side. Meanwhile, our non-fuel retail segment continues to grow faster than fuel, with a double-digit rate of 15%.
This is driven by management initiatives to unlock incremental value of the high-margin non-fuel retail business and grow its contribution. The achievements I've talked about are enabled by the continued success of our ADNOC Rewards loyalty program. With nearly 2.5 million members, the program covers over half of the UAE car park and continues to expand. In the past 12 months alone, membership increased by 20%, adding more than 400,000 new users. The program is a key enabler of our strategy to scale non-fuel retail and to turn around our service stations into high-traffic destinations. When customers feel valued and rewarded, they are more likely to make additional purchases, boosting both fuel and non-fuel retail performance. Rewards members show higher fuel and convenience store basket sizes, driven by hyper-personalized offers and upselling campaigns. With personalization, engagement, and scale, ADNOC Rewards is helping us unlock incremental growth across our network.
We are proud to report strong progress on our network expansion and strategic priorities. In the first half of 2025, we've added 47 stations and already met our full-year guidance of 40 to 50 new stations. Given this strong momentum, we are now upgrading our full-year guidance to 60 to 70 new stations, including 50 to 60 in the Kingdom of Saudi Arabia. Other elements of our guidance remain unchanged. We are expanding our fast and super-fast EV charging infrastructure. We plan to install around 100 charging points at strategic locations, aligned with EV adaptation and on-the-go charging demand. In the first half of this year, we've added over 80 new charging points. We are investing $250million- $300 million this year with a strong focus on organic growth.
As part of our investment strategy, we are reallocating capital towards convenience and mobility to transform our stations to destinations of choice. This includes new property units for rent, upgrades to our car wash and lube services, and continued investment in technology and innovation, including EV infrastructure. Given the reallocation of capital, we expect our non-fuel retail segment continues to outpace growth in fuel. With that, I'll now hand over to Athmane, who will elaborate on how we are delivering on our strategy.
Thank you, Bader. Let me walk you through the progress we have made on our growth agenda. We delivered record H1 fuel volumes, a clear testimony of successful execution and our ability to drive higher footfall across our network. In our UAE and KSA networks, daily retail fuel volumes increased by 9% year-on-year, while commercial fuel deliveries increased by over 4%. This reflects strong momentum across both customer segments. Growth was also supported by continued network expansion. In H1, we opened seven new stations and secured contracts for additional sites in Saudi Arabia under capital-light dealer-owned company operators, DOCO model. Finally, our aviation business in Egypt continues to perform exceptionally well, with volumes up by more than 20% compared to the same period of last year, reflecting strong growth of tourism activity.
These operating results reinforce the strength of our platform and our ability to scale efficiency while capturing demand across key markets. As you know, we are growing in Saudi Arabia through a DOCO model. It allows us to expand with minimal capital deployment as station owners handle rebranding and upgrades under our control. Under the ADNOC Distribution brand, the service station fuel margin increases from SAR 0.09 to SAR 0.15 per liter. Both parties share this uplift of SAR 0.06 in fuel margin, as well as non-fuel retail revenues. Looking ahead, we expect strong momentum to continue. We plan to add 50 to 60 DOCO stations to our KSA network in 2025. Let's talk about how we are future-proofing our business. ADNOC Distribution has a differentiated and unique EV value proposition for the UAE drivers who are choosing our sites to charge their cars.
First of all, in this business, location is everything, and we have the answer: the largest network in the UAE. We are addressing one of the biggest concerns for EV drivers: range anxiety. We have identified eight inter-Emirates highways to be electrified by building EV charging hubs. We are adding EV charging points to high-traffic stations that are destinations for our customers. Secondly, our network sits on our own land and long-term leases, giving us long-term control. Thirdly, we offer a superior customer experience for EV drivers with convenience stores, car wash services, and F&B options, all in one stop. Longer EV charging dwell times are translating into higher non-fuel retail conversion. Over the past 12 months, we have tripled the number of charging points across our network, now exceeding 300. EV charging is a high-margin, high-potential business.
We operate under a robust regulatory environment with clear tariffs and utility costs, which gives us strong visibility on returns. As stated before, we expect EV charging to match the profitability of our fuel business as long as the on-the-go segment captures 20% of EV customers' charging demand. We are also helping our customers reduce their carbon footprint by strategically expanding our fast and super-fast EV charging infrastructure. Now, what about our non-fuel retail business, which is, as you know, a strategic element of our growth ambition? It includes convenience stores, car wash, lube change, property management, and vehicle inspection centers. In the first half of 2025, daily non-fuel retail transactions increased by 11%, or two times faster than fuel transactions. At the gross profit level, we saw non-fuel retail growing 15%, or again, about two times faster than fuel.
Performance of convenience stores, which accounts for 40% of the non-fuel retail gross profit, was particularly strong, with gross profit up more than 20% year-on-year. We have been enhancing our retail offerings to attract more customers into our stores, leading to higher customer footfall, stronger conversion rates, and improved margins. In food and beverage, one of our highest margin categories, growth was led by rising coffee volumes and successful launch of new products. More specifically, barista-prepared drinks saw a significant 25% increase in daily sales compared to the same period last year. These results reflect the strength of our retail strategy and ability to capture more value from every customer visit across our network. Let's take a closer look at our convenience store business under the ADNOC Oasis brand. ADNOC Oasis is a high-margin, high-growth platform that is at the core of our retail strategy.
ADNOC Oasis is also a number one FMCG player in the UAE convenience market. We are focusing on five main initiatives. First of all, transforming Oasis stores into food venues destinations, featuring gourmet food, specialty coffee, and new offerings supported by AI tools that optimize freshness and reduce sweat. Secondly, we are scaling personalization using insights from 2.5 million ADNOC Rewards members. Thirdly, this year we introduced AI-based clustering to tailor assortments and pricing by locations and customer profile. To showcase the ADNOC Oasis brand, we are planning to launch next year private-label products to boost quality perception and sales. Finally, we are also bringing the convenience stores' products to our customers while they are fueling. This initiative has contributed already to a conversion uplift of over 100 basis points.
Our recent efforts have led to over 20% sea store gross profit growth, powered by category expansion, targeted marketing, and stronger customer engagement. Now, beyond convenience stores, we are unlocking new pools of growth across all our non-fuel retail verticals, including the car wash, lube change, property management, and vehicle inspection centers. We are focusing on three key initiatives. Number one, creating a one-stop destination for car care. We are expanding services by bundling garage offerings and introducing spare parts. We are upscaling car wash operations. Upgraded facilities and high-capacity tunnels are capturing untapped demand and delivering faster premium service. Finally, enhancing real estate returns. We are attracting more quick-service restaurant brands, optimizing terminal mix, and increasing footfall across our network. We see further strong potential for these verticals to contribute even more to our earnings.
This is about building a diversified, high-margin retail ecosystem that complements our core fuel business and drives long-term value. Let's now turn to AI and digital innovation, the key enablers of our growth strategy. We are leveraging these technologies across three core strategic pillars: accelerating growth, boosting efficiency, and enhancing customer experience. Today, I would like to share with you a recent initiative that perfectly illustrates how we are delivering on all three. We know that food preferences, purchasing power, shopping missions, and customer expectations vary significantly by location across our 380 convenience stores. To better serve our customers and take those differences into consideration, we needed to cluster our network and tailor our offerings. That's where data comes in. We analyzed over 240 million transactions and defined five distinct store clusters, including highways, cities, and industrial areas.
Based on these insights and using AI agents, we are now deploying different assortments and planograms at clusters' level to sell more products based on customer preferences, targeting higher conversion and contribution to our earnings. In short, AI is helping us to grow faster, operate leaner, and serve smarter, creating value across every part of our business. I will now hand over to Ali to present the highlights of our financial performance.
Thanks, Athmane. Good morning and good afternoon, everyone. Delighted to take you through how the growth narrative shared by Bader and Athmane is showing up in our financials. The periodic results are, of course, a snapshot in time, but nevertheless, a credible barometer for measuring the execution of the strategy. H1 2025 was a strong period for ADNOC Distribution, with earnings growing at a double-digit rate compared to last year. Headline EBITDA increased by 10%, even with much lower inventory gains. Most importantly, underlying EBITDA, excluding inventory effects and one-off items, was up by 18%, reflecting the strength of our core business and operations. Net profit also increased at a double-digit rate of 12%, supported by solid business fundamentals and lower finance costs. This strong profitability puts us firmly on track to deliver our strategy.
With a return on capital employed of 30%, we are delivering robust returns from the organic capital investments made over the past few years. It is worth mentioning that our CapEx program continues to be underpinned by a highly competitive screening criteria. Let's now look at the key highlights of our operating performance. In H1 2025, we delivered record H1 fuels volume: 7.6 billion liters, driven primarily by strong growth in the retail mobility fuel segment. Commercial B2B fuels volume also increased, supported by continued economic growth momentum in the region. We realized strong and highly encouraging growth of 10% in non-fuel retail transactions, reaffirming the strength of our customer value proposition, product offering, and the impact of our ADNOC Rewards loyalty program. Let's now look at gross profit generation and performance across our key operating segments.
Retail fuels gross profit increased by 3%, driven by the strong volume growth, despite a nearly $30 million drop in inventory gains. Commercial fuels delivered 22% growth in gross profit, attributable to higher volume, favorable pricing environment, and proactive margin management, including high grading of the customer portfolio. Non-fuel retail continued to outperform fuels retail on the growth front, with gross profit increasing by 15%, supported by a higher number of transactions, stronger conversion rate, upgraded car wash services, and new property management initiatives. Now turning to operating expenditure, we remain focused on driving cost efficiency across all verticals. After delivering $18 million in like-for-like OpEx savings in 2024, we achieved additional savings of $3 million in H1 2025. We are firmly on track to deliver $50 million of savings by 2028.
The increase of 6% in operating costs was attributable to network expansion and incremental profitability in non-fuel retail and commercial segments. Most importantly, cash OpEx, as % of gross profit, shrank to 37% in H1 2025, from 38% in H1 2024, despite lower inventory gains. Moreover, unit OpEx remained unchanged, reflecting the true revenue and profit accretive nature of these costs. Optimization of structural costs and making the right choices to incur OpEx on profitable growth are key pillars of our disciplined cost management. Let's now look at our EBITDA performance. In H1 2025, underlying EBITDA demonstrated strong 18% growth year-on-year, driven by higher fuel volume in both retail and commercial segments, strong non-fuel retail growth, and disciplined cost management. This growth reflects the strength of our core business and reassures that we are firmly on track to deliver the strategy outlined in 2024.
Importantly, all key verticals contributed to this performance, showcasing the resilience and scalability of our platform. Now turning to cash generation, we converted strong EBITDA to cash, but in H1 2025, we experienced a material increase in working capital due to timing of certain payments in Q1 2025. Some of those negative working capital effects were reversed during quarter two. Excluding working capital changes, we generated more than $400 million of cash. CapEx spending during the period was $163 million, which compares to the full-year 2025 CapEx plan of $250 million- $300 million. The net debt-to-EBITDA ratio of 0.8x underscores our strong financial standing and favorably positions the company for future growth and shareholder value creation. Let me hand it back over to Bader for closing remarks.
Thank you, Ali. Before we open the floor to Q&A, let me recap our outlook and strategic priorities for the remainder of 2025 and beyond. First, we are making strong progress toward our 2028 objectives: driving footfall, expanding non-fuel retail, scaling EV charging, and strengthening our international footprint. Backed by a robust balance sheet and solid cash flow generation, we'll continue to invest in a disciplined manner in the UAE's growing core market, accelerating in KSA , and pursuing value accretive inorganic opportunities. Secondly, we expect growth momentum to continue. Our strong H1 2025 results reinforce our track record of delivery. For the full year, we are upgrading our guidance for the service station network growth to 60 to 70 new sites. We are reiterating our 2025 target of 100 additional charging points through disciplined deployment and maintaining CapEx guidance of $250 million- $300 million for 2025.
Thirdly, our focus remains on delivering higher total shareholders' return. Between 2025 and 2028, we aim to distribute $700 million annually, or a minimum of 75% of net profit, whichever is higher, ensuring that the sustainable value creation and future earning growth transform into shareholders' return. For the first half of this year, we expect to distribute $350 million, or around $0.103 per share, to be paid in October. In short, we're executing with discipline, growing with purpose, and delivering results. We are now happy to take your questions.
Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star one on your telephone keypad. If you're on a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one to ask a question. If you are in the event via the web interface and would like to ask a question, simply type your question in the ask a question box and click send. We'll go first to Giuseppe Villari with Morgan Stanley.
Hi. Thank you for the opportunity to ask questions. We have a couple, if we may. First of all, we would like to shed more light on the competition in Saudi . How are you seeing competition there? When do you expect a more relevant contribution financially from your DOCO stations? What was the main driver behind the very strong commercial margins that you had during the quarter? What's the outlook for the remainder of the year? Thank you.
For the presenters, could you please check your mute button if you're speaking or we are unable to hear you?
Yes, thank you for the question. I'll take the first one regarding the market in the Kingdom of Saudi Arabia. Of course, we are more focused about our activities. We have full respect to the competition, but what we are more concerned is what we are doing down there. We are expanding. We are growing. We have this cost-effective CapEx program with the DOCO model. Today, we've doubled the commitment in that country from 70 stations at the end of 2024 to 140 today. We are very committed. It's a big market. You'd appreciate you are talking about a market size that is north of 10,000 stations and with a population that is growing. I think ADNOC Distribution stands the chance to also have a meaningful stake and play in that country and will continue to grow through our smart growth strategy.
Okay. Thank you, Bader. Just on the second question regarding the commercial business. As you rightly said, the corporate margin, excluding the inventory gains, increased by roughly 18% from AED 0.28 per liter in Q2 of last year to AED 0.33 per liter in Q2 of this year. We are talking about the corporate business, which is 90% of the commercial segment that you see in our disclosures. We are talking about the gas oil that we sell to B2B customers, which is not regulated in the UAE compared to the retail gas oil and gasoline business, which accounts for 65% of the cash flow. This means that the margin per liter can be volatile, and this is what we have seen over the past quarters. They are influenced by the market dynamics, i.e., the supply and demand, but also the spot deals.
Q2 2025 corporate fuel margins actually was, as I stated earlier, AED 0.33 per liter, which is near the average level recorded during 2022 and 2024. The reason is the application of dynamic pricing by our corporate team and proactive corporate fuel margin management. Regarding the outlook, we believe that we should be in the range or in the average that I stated just earlier that we had historically.
Thank you. We'll go next to Afaq Nathani with International Securities.
Hello. Congratulations on a great set of numbers. A couple of things from my side. Firstly, very encouraging to see that the company has been able to book inventory gains during the quarter, which witnessed declining fuel prices. Just wanted to understand how this was achieved. My understanding was that usually inventory gains are usually inventory gains come in when the pricing environment is going upwards. The second question I had was on your target of 1,000 stations. It looks like you're reaching that pretty quickly, 940 already. Is the management talking about revising that target upwards, or are you sticking to that for now? Thirdly, on the volume growth, which has been very strong, of course, on a year-on-year basis in the second quarter. Just wanted to understand, is there a potential way to look at the growth without the impact from floods last year?
More of on an organic basis.
Okay. Thank you very much. Ali, if you don't mind, if you can take the question on the inventory gains.
Yeah.
Please.
Thank you, Athmane. Inventory gains is actually more of a function of volatility. If you look at this quarter, in quarter two, we saw prices going down in the beginning, and then in June, you saw them shooting up. Essentially, it's that volatility which impacted the inventory gains as they are. Overall, on an H1 basis this year, the volatility was towards a more declining trend, minus some of the events which took the price up versus last year. Hence, you're seeing a shortfall in the inventory gain versus last year.
I think to the second question regarding the 1,000 stations guidance we gave over the business plan in the five years by 2028. Yes, indeed. At H1 of 2025, we've reached to 940 stations. We are encouraged with the progress that we've made. In the first half alone, we've actually surpassed the guidance that we gave for this year. If you recall the guidance we gave for this year, it was 40 to 50 stations. We've closed the first half of this year at 47 stations. Encouraged with this momentum that we are building, the smart growth strategy, the quality of stations that we're bringing about, we are upgrading the guidance to 60 to 70 new stations within 2025. This momentum will continue in the balance of the year.
Of course, we'll provide further guidance subsequently once we've closed 2025 and represent the ambition towards the 1,000 and the timing, and if there's any indication to move beyond that. Thank you.
Okay. The last question from Afaq regarding the retail fuel volumes and also the impact of the floods last year. Just to remind everyone, Q2 retail fuel volumes in UAE and KSA , so GCC as we report, increased by roughly 13% year-on-year. The main drivers actually have been, one, the network growth, two, the management initiatives that we have put in place to attract more customers to our stations, and also the fact that the UAE fuel volumes have been driven by strong mobility in Abu Dhabi and in Dubai, especially where we have seen the non-oil GDP for the Emirates actually increasing by 6%. Now, when we look at the impact of the floods and Ramadan, and that's what we were discussing earlier, we had an increase of roughly 12%, 13%. If you strip out these effects, you would be more close to 10%, actually.
Very clear. Thank you so much, and good luck for the rest of the year.
Thank you.
We'll move next to Goldman Sachs. Caller, if you'd please state your name before posing your question.
Yes. Hi. This is Faisal from Goldman Sachs. I have two questions on my end. The first is on the SG&A figure. Effectively, you've been talking a lot about operational efficiencies. Obviously, we've seen the number creep higher over the past two quarters. Should we expect a reversal in the second half, or should we expect the number to kind of max out at these levels? That's my first question. My second question relates to, obviously, we've seen really good numbers. You've talked a lot about the commercial business and the margins and the volumes there. As we think about the underlying growth of 12% for the full year, do we expect this strength to continue in the second half, or should we expect some deceleration?
Finally, if you can talk a bit about the noon tie-up that you have today, does that create a meaningful opportunity over time, or is it something on the smaller side? Thank you.
Okay. T hanks for the question. On the operating expenditure, as we have seen, revenue and profitability have grown significantly as well. The operating expense increase you are seeing is actually directly attributable to those incremental revenues. One way of looking at it is if you look at our unit OpEx, which is cost per liter, that has remained flat across the period. If you look at it, OpEx as % of gross profit, you will see it has shrunk. It's 37% in H1 versus 38% last year, which is a good testimonial that the increase in OpEx, and because obviously non-fuel retail is increasing as well, and that doesn't have a corresponding volume. Essentially, based on these two metrics, the cost management and the discipline which we have in the company is working.
Obviously, when the new revenues come in, and if we have to release more cost for it, we are doing it, but we are making very conscious choices. It has to be profitable.
Thank you, Ali. Regarding the second question before we jump to a noon question that will be taken by our CEO, yes, the growth has been very, very strong, as you highlighted, Faisal. We saw clearly a very strong underlying growth with double-digit increase. What we have witnessed in the past month or so is still good mobility, a good level of volumes. What we are pushing for is, of course, growth actually also in the second half. What we can tell you is that all initiatives are put in place to crystallize this growth. On top of that, I guess the way you should look at it is, as a management team, we are happy and confident with the numbers, with the consensus numbers when it relates to the EBITDA and the net profit for the full year.
Let's see how Q3 comes, and we'll see, we'll update the market. Again, with the consensus numbers, we are confident.
I think the last question was on noon. We remain excited with this partnership, this whole workstreams and initiative that are being pursued for execution. One, we are already in alignment to develop 40 to 50 dark stores within our existing network, and we will be sharing revenues from those dark stores for any delivery coming from those locations that we've agreed upon. Today, secondly, the ADNOC Oasis stores and cafe will also be available to our esteemed customers and noon customers through their app, the noon platform, NowNow platform. That's great. Additional channels for our businesses will further benefit from this partnership as the noon drivers and bikers will be delivering our items and products to the customers. Lastly, we are also exchanging strategy towards benefiting from the large scale that will be created by both of us in the FMCG procurement.
This is a scale, an increased scale, that we stand to both of us benefit and enhance our margins. Exciting partnership. It's being executed and will definitely contribute to ADNOC Distribution in the coming phase.
Thank you very much.
We will go next to Anna Kishmariya with UBS.
Hi. Good day. Thank you for taking my question. Congrats on a strong set of numbers. I have two. First, on non-fuel retail. In your MD&A, you mentioned that there was a number of marketing and promotion campaigns this quarter. Can you please elaborate on that? What is your outlook for the second half? I think the promotion campaigns were behind the small drop of the average basket size. What is your outlook for the second half of the year? Do you expect the average basket size to pick up again? The second question will be around these DOCO stations. Can you please remind us how long it takes to refurbish the stations? When will we see the impact from the first stations, which were contracted late last year, to be visible on the numbers? Thank you very much.
Yes. Sorry if I answered the question. The latter question is about the timing of getting the DOCO s online. That is something that is under the execution environment, and we see them coming online early next year. This is benefiting from our boots on the ground in the country. As to the earlier question, I believe you've discussed it. If you can repeat that question so that we understand clearly. You are talking about marketing campaign?
Sure. You had some promotions in non-fuel retail in your convenience stores, and I guess that was behind this basket size drop a little bit quarter- on- quarter. Maybe you can comment whether you plan a lot of this marketing and promotions campaign happening in the second half of the year, or you will focus more on the basket growth in the second half for the non-fuel retail.
The number of transactions have increased for us. Maybe you're reading out of the basket size. It's slightly dropped. However, there's an increase in the number of transactions by at least 5%, 5.5% year-on-year. The non-fuel retail has grown by 10.4% as well. I think the NFR activities remain central to our strategy. We want to double down on the contribution of NFR. ADNOC Oasis is one of the key attention areas for us. We have multiple initiatives. We have regular campaigns that we do from time to time, promotional campaigns, seasonal campaigns, but we're also integrating AI to understand the assortments, the inventory management, so that we are efficient. The ADNOC Rewards has grown 20% during the first half of this year. We are now reaching 2.5 million customers.
I think our loyalty program is also resonating very well with our customers, which makes them reoccurring customers coming back to us again and again, perhaps even more than once in a given day, given that the opportunity to be also rewarded with our partners. We've engaged and onboarded multiple partners.
Understood. Thank you.
We will go next to Lydia Rainforth with Barclays.
Thank you, and good afternoon. A couple of questions, if I could, and slightly bigger picture. When you think about the results this time around, obviously, you've had strong performance across volume growth, across the convenience side, and the cost side. When you think about that, which parts have surprised you the most, or are you most impressed by? Secondly, if I come back to the AI comments, because I think that's really interesting as to how you drive the business, how you drive the cost base coming through. Can you just give us some more examples around that? How do you ensure that that gets deployed across the business? Sorry, a final one, if I could. Just given all of this, I mean, and you've been very consistent around the dividend side. I'm just thinking, if you've got additional growth, the profitability is coming in at a strong level.
I mean, are you at the stage where we still need an acquisition to think about where the dividend goes from here? Thanks.
Sorry, we seem to have dropped off. Was the answer clear before we went offline?
No, I didn't hear anything. Sorry.
I'm so sorry. Okay. Just to try to clarify, we believe that the non-fuel business is central to our five years of business plan and strategy, where the transactions, when it comes to the non-fuel, have actually grown to more than 10% in the first half of this year. Also, the most profit have also grown close to 15%. Our customers are loyal to us. We've seen 20% growth in the number of customers registered on our ADNOC Rewards and ADNOC app. These customers are coming back to us again and again, trying to, of course, enjoy the quality of services that we have. Of course, they are loyal to the brand through the ADNOC Rewards brand . 2.5 million customers is definitely a sizable amount of customers coming from the fact that there's 4 million cars in the UAE.
Nearly half of that commuting drivers, they come to our service station. Very encouraged with the numbers. We are happy with the performance of our ADNOC Oasis. If you are reflecting out of the basket size, there's a slight drop there. On the contrary, gross profit is up. Number of transactions are up, and the number of customers have surpassed now 2.5 million customers out of a pool of 4 million cars. This is very, very, very encouraging for us. Thank you.
We will go next to Ildar Khaziev with HSBC.
Yes. Hi. Thank you so much. Hello. Thank you so much. I have a question about the Saudi stations again. If I recall correctly, in the past, you said that not all of those stations are nearly operational. Can you tell us how many of them actually were operational during the second quarter? Thank you.
Hello. Thank you for the question. I think I've stated already the DOCO s will start to come online at the beginning of next year. We will start to see contribution and volume coming through Q1 numbers. The program is attractive. It's a smart growth strategy in that country. We are pleased with the quality of stations that you are bringing about. The contribution will start to come through the volumes in early next year.
Thank you. I'm sorry. I'm a bit confused. You're saying that the new stations, which were launched this year, are not yet contributing to volume. May I ask, what's the criteria actually for disclosing the new stations in your reports? Thank you.
These are committed contracts in the Kingdom of Saudi Arabia. The business case and the commitment towards those stations have been sanctioned, and they are now going through the execution. The volume that you are seeing is largely at the moment coming from the UAE market.
Understood. Thank you.
One final reminder, if you had a question, it is star one from the telephone. There are no other questions on the phone line. I will turn it back for any closing remarks or addressing of the web questions.
Okay. If I may, we have one question on the chat, which is the following: despite a growth in a drop, sorry, in revenues, net profit increased by 12%. What are the main drivers behind improved margins? Again, our business is a margin per liter business. About 65% of the cash flows come from the retail fuel business, where we have a contract, a supply agreement with ADNOC Main, the main shorter, that provides us a guaranteed margin on the fuel. On top of that, we record inventory gains when the oil prices go up and no inventory losses actually when the oil prices go down. The reason for the EBITDA growth and the net profit growth is actually driven by the impact of the initiatives that were stated earlier by the rest of the management, but also the control of the OpEx that we have across the organization.
Ali, please, if you want to add anything.
Yes. Thank you, Athmane. I think you're spot on. Just to supplement what Athmane just said, we also had lower oil price during H1. As Athmane rightly said, it's a margin per liter business. The retail piece Athmane mentioned is defined margins. Obviously, you saw lesser inventory gains because of the similar reason in terms of the overall price dropping. Yeah?
Were there any other web questions you would like to address?
Yes. We have another question. As your Saudi business is set to grow significantly, could you provide an overview of how the throughput per station in Saudi Arabia compares to that in the UAE? What improvements do you expect after refurbishment? If you look at the overall market, we don't provide numbers on our Saudi assets, given the fact that we still have a low number of stations compared to the competition, but it's easy to see through the disclosures of the peers that the volumes overall in Saudi Arabia are lower than the UAE. This is one. Two, regarding ADNOC Distribution, what we have seen in Saudi Arabia for the DOCO stations, actually, and for stations where we did refurbishment, is an increase between 15%- 20% of our volumes that has been granted by the brand and the value proposition of ADNOC Distribution to the KSA clients. Okay.
Thank you very much. Do we have any questions? If not.
I have no other phone questions holding.
Thank you very much, everyone. We hope to meet you in the forthcoming meetings. Thank you very much for attending. We are very happy with the results and very positive on the outlook. We see you soon. Thank you very much.
Thank you. Ladies and gentlemen, that will conclude today's call. We thank you for your participation. You may disconnect at this time.