ADNOC Distribution’s shareholders approved hiking the company’s DPO for the coming years as well as a share buyback programme, at the company’s OGM held on 4 April 2019. Details below: 
-       FY2018: AED0.1176/share (includes 5.88 fils/share dividend already paid for last year) – same as initial proposal (no change) – ex-dividend date is 11 April 2019 for the remaining tranche (total DPO of 69%). 
-       FY2019: AED0.1910/share, AED2.39bn (USD650mn) – this is versus guidance of at least USD400mn for each of 2018 and 2019 at the time of the IPO in 2017, which implies a dividend yield of 7.8% (will be paid semi-annually in Oct 2019 and April 2020).
-       FY2020: AED0.2057/share, AED2.57bn (USD700mn), which implies an 8.4% dividend yield (will be paid semi-annually in Oct 2020 and April 2021).
-       FY2021 onwards: minimum payout of 75% of distributable profit versus previous guidance of 60%. 
-       Plans to buy back up to 62.5mn shares (5% of free float, 0.5% of the total company) during a 12-month period as the “stock is trading below levels consistent with its view of the company’s growth prospects” – the shares are worth AED153mn (the company has a net debt position of AED11mn and a cash balance of AED5.5bn as of end-2018). The share buyback is still subject to regulatory approval. 

Hatem Alaa, CFA, Nada Amin, Mirna Maher,

ADNOC Distribution (AD): AED2.50 as of 4 Apr. 2019, Rating: Buy, TP: AED3.20/share, MCap: USD8,345mn, ADNOCDIS UH/ADNO.AD