Abu Dhabi National Oil Company For DistributionADX: ADNOCDIST

ADNOC Distribution Q4 2025 Financial Statements – English – 03 February 2026

· Issued by Abu Dhabi National Oil Company for Distribution

ADNOC Classification: Need-To-Know

Report and consolidated financial statements For the year ended 31 December 2025

ADNOC Distribution https://www.adnocdistribution.ae



Reports and consolidated financial statements for the year ended 31 December 2025

Directors' report 1

Independent auditors' report 2-10

Consolidated statement of financial position 11

Consolidated statement of profit or loss 12

Consolidated statement of comprehensive income 13

Consolidated statement of changes in equity 14

Consolidated statement of cash flows 15

Notes to the consolidated financial statements 16-59

Directors' report

for the year ended 31 December 2025

The Directors present their report together with the consolidated financial statements of Abu Dhabi National Oil Company for Distribution PJSC (the "Company") and its subsidiaries (collectively referred to as the "Group") for the year ended 31 December 2025.

Board of Directors:

The Directors of the Company are:

Chairman H.E. Dr. Sultan Ahmed Al Jaber

Members H.E. Ahmed Jasim Al Zaabi

Khaled Mohamed Abdulla Alalkeem Alzaabi Khaled Salmeen

Marwan Naim Salem Nijmeh Paula Disberry

Saif Ateeq Sultan AlFalahi

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 year, the Group reported revenue of AED 35,896,617 thousand (2024: AED 35,453,716 thousand). Profit for the year was AED 2,851,042 thousand (2024: AED 2,472,283 thousand).

The appropriation of the results for the year is as follows:

31 December 2025

AED'000

Retained earnings as at 1 January 2025

1,783,705

Profit for the year

2,851,042

Transfer to statutory reserve

(2,415)

Dividends declared

(2,571,250)

Non-controlling interests

(57,042)

Retained earnings as at 31 December 2025

2,004,040

The Board of Directors approved a final dividend of 10.285 fils per share to the shareholders in respect of the year ended 31 December 2024. The dividend comprised of AED 1,285,625 thousand, which was approved at the General Assembly Meeting held on 25 March 2025 and paid on 8 April 2025.

The Board of Directors approved an interim dividend of 10.285 fils per share to the shareholders in respect of the first half of 2025. The dividend comprised of AED 1,285,625 thousand, which was approved during the Board of Directors Meeting held on 22 September 2025 and paid on 1 October 2025.

For the Board of Directors



Chairman

2 February 2026 Abu Dhabi, UAE









Independent Auditor's Report To the Shareholders of Abu Dhabi National Oil Company for Distribution PJSC

Report on the Audit of the Consolidated Financial Statements Opinion

We have audited the consolidated financial statements of Abu Dhabi National Oil Company for Distribution PJSC ("the Company") and its subsidiaries (collectively referred to as the "Group"), which comprise the consolidated statement of financial position as at 31 December 2025, and the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the applicable requirements of Abu Dhabi Accountability Authority ("ADAA") Chairman Resolution No. 88 of 2021 Regarding Financial Statements Audit Standards for the Subject Entities. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) ("IESBA Code") together with the other ethical requirements that are relevant to our audit of the Groups' consolidated financial statements in the United Arab Emirates, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.





2



Key Audit Matter

How our audit addressed the key audit matter

1- Impairment assessment of intangible

assets including goodwill

As at 31 December 2025, the Group has recognised goodwill and other intangible assets with indefinite useful lives amounting to AED

243.24 million and AED 89.94 million respectively, aggregating to 1.89% percent of the Group's total assets.

Goodwill and intangible assets with indefinite useful lives are required to be tested for impairment, at least on an annual basis. For this purpose, goodwill and other intangible assets with indefinite useful lives are allocated to the Retail, Corporate and Aviation CGUs, the recoverable amount of which is supported by value-in-use calculations based on future discounted cash flows. Based on the assessment, management concluded that the intangible assets including goodwill were not impaired as of 31 December 2025.

We identified the impairment of goodwill and other intangible assets as a key audit matter due to the use of complex and subjective management estimates based on management's judgement of key variables and market conditions.

We refer to Note 3 and 6 to these consolidated financial statements for the accounting policy and related disclosures respectively.

Our audit approach included the following:

  • we obtained an understanding of and evaluated management's process including key controls over impairment assessment;

  • we obtained management's future cash flow forecasts and tested the mathematical accuracy of the underlying value-in-use calculations;

  • we involved our valuations specialists to evaluate the appropriateness of the methodology used by the management, and to assess the reasonableness of key assumptions used in the calculations. When assessing these key assumptions, we discussed them with management to understand and evaluate management's basis for determining the assumptions; and

  • we assessed the appropriateness of the related disclosures included in note 6 to the consolidated financial statements.

Key Audit Matter

How our audit addressed the key audit matter

2- Revenue recognised from retail sales and

related IT systems

Revenue from retail sales amounted to AED 24,580.73 million for the year ended 31 December 2025.

There are complex IT systems in use which comprise multiple IT applications which are used to process large volumes of data pertaining to retail sales transactions that occur throughout the year.

Given the complexity of the IT systems involved there is an inherent risk around accuracy and completeness of revenue recognized and therefore we considered this area to be a key audit matter.

The Group's accounting policies relating to revenue recognition are presented in note 3 to the consolidated financial statements and details about the Group's revenue are disclosed in note 20 to the consolidated financial statements.

Our audit approach included the following:

  • we obtained an understanding of the significant revenue processes and identified key relevant controls and IT systems;

  • we involved our IT Specialists to obtain an understanding of the control environment and to test General IT controls over IT systems and applications involved in the revenue recording process;

  • we evaluated the design and implementation of controls and tested the operating effectiveness of automated controls residing in the IT systems and applications involved in the revenue recording process;

  • we assessed the Group's accounting policy for revenue recognition against the requirements of IFRS Accounting Standards;

  • we performed a test of details on a sample basis to test the reconciliation of daily retail sales to cash collections and subsequent bank deposits;

  • we performed substantive analytical procedures over retail sales revenue by building an expectation on the basis of quantities sold and regulated prices; and

  • we assessed the adequacy of disclosures in the consolidated financial statements relating to revenue.

Key Audit Matter

How our audit addressed the key audit matter

3- Right-of-use assets

As part of the Group's plans to expand its distribution network in the United Arab Emirates, Kingdom of Saudi Arabia and Egypt, the Group has entered into multiple leasing arrangements. During the year, the Group has recorded additional right-of-use assets and related lease liabilities amounting to AED 42.32 million.

Determining the present value of the lease payments requires management to apply significant judgments and estimates to determine the discount rate and lease term, which has been disclosed in note 4 of the consolidated financial statements.

Additionally, due to number of service stations and other assets added every year, management encounter certain delays in the finalization of the agreements on account of certain approvals and communication from the relevant departments which affects the process of collating a complete set of lease contracts.

Given the complexity and judgments involved there is an inherent risk around accuracy and completeness of assets and liabilities recognized as at year end and therefore we considered this area to be a key audit matter.

Our audit approach included the following:

  • We obtained an understanding of the Group's process for identifying the agreements related to the right-of-use assets and lease liabilities;

  • we obtained an understanding of the system generated lease assessment and recomputed the amount based on the inputs from the contract to ensure accuracy of the results;

  • we assessed the validity and completeness of the list of service stations and other assets used for the underlying calculation;

  • we performed test of details by inspecting the lease agreements, on a sample basis to determine the existence of the lease;

  • we recalculated interest on the lease liabilities and depreciation of the right-of-use assets and agreed these to the consolidated financial statements;

  • we performed detailed analysis and made enquiries of management related to the incremental borrowing rates used on the lease assessment; and

  • we assessed the adequacy of disclosures in the consolidated financial statements.

The Group's accounting policies are presented in note 3 and details about the Group's right-of-use assets are disclosed in note 10 to the consolidated financial statements.

Key Audit Matter

How our audit addressed the key audit matter

4- Decommissioning obligations related to

assets constructed on leased land

The Group has recorded a provision for decommissioning of AED 167.39 million. These provisions relate to an obligation to dismantle service stations constructed on leased land, at a future date.

The Group operates a comprehensive network of fuel stations in Dubai and Northern emirates in UAE and Egypt on land leased from third parties. The Group has contractual obligations to restore the land to its original condition at the end of the lease period in respect of these lands.

The provision is based upon current cost estimates and has been determined on a discounted basis with reference to current legal requirements and available technology.

At each reporting date, the provision for decommissioning is reviewed for remeasurement in line with changes in observable assumptions, timing and the latest estimates of the costs to be incurred at reporting date.

The Group's accounting policies relating to the provision for decommissioning obligations are presented in note 3, the critical accounting estimates made, and judgements applied by management are disclosed in note 4 to the consolidated financial statements and details about the provision for decommissioning obligations are disclosed in note 19 to the consolidated financial statements.

Our audit approach included the following:

  • we obtained an understanding of the Group's process for identifying the agreements for which a provision needs to be raised and testing the adequacy of controls over this process;

  • we evaluated the approach adopted by management in determining the expected costs of decommissioning and whether the significant judgements applied and estimates made are reasonable;

  • we obtained an understanding of the cost assumptions used that have the most significant impact on the provisions and whether these assumptions are appropriate and discussed the estimates used by the management;

  • we reviewed the discount rates and inflation rates used in the estimation to determine if they are appropriate;

  • we evaluated the skills, objectivity and competence of the management expert; and

  • we assessed the adequacy of disclosures in the consolidated financial statements.

Other Information

Management is responsible for the other information. The other information comprises the Directors' report, which we obtained prior to the date of this auditor's report, and the Operational and Financial Highlights, Chairman's Message, CEO's Message and the other information in the annual report, which are expected to be made available to us after that date. The other information does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance or conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we will read the Operational and Financial Highlights, Chairman's Message, CEO's Message and the other information in the annual report, if we conclude that there is a material misstatement therein, we will be required to communicate the matter to those charged with governance and consider whether a reportable irregularity exists in terms of the auditing standards, which must be reported.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as issued by the IASB and their preparation in compliance with the applicable provisions of the Articles of Association of the Company and UAE Federal Decree Law No. (32) of 2021, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the applicable requirements of Abu Dhabi Accountability Authority ("ADAA") Chairman Resolution No. 88 of 2021 Regarding Financial Statements Audit Standards for the Subject Entities will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISA's and the applicable requirements of Abu Dhabi Accountability Authority ("ADAA") Chairman Resolution No. 88 of 2021 Regarding Financial Statements Audit Standards for the Subject Entities, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risk, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error, as fraud may involve collusion, forgery, intentional omission, misrepresentations, or the override of internal control.

  • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.

  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  • Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosure is inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

  • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

    Auditor's Responsibilities for the Audit of the Consolidated Financial Statements (continued)

  • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for the purposes of the group audit. We remain solely responsible for our audit opinion.

    We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

    We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

    From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

    Report on Other Legal and Regulatory Requirements

    As required by the UAE Federal Decree Law No. (32) of 2021, we report that for the year ended 31 December 2025:

  • We have obtained all the information we considered necessary for the purposes of our audit;

  • The consolidated financial statements have been prepared and comply, in all material respects, with the applicable provisions of the UAE Federal Decree Law No. (32) of 2021;

  • The Group has maintained proper books of account in accordance with established accounting principles;

  • The financial information included in the Directors' report is consistent with the books of account

    of the Group;

  • As disclosed in note 1 to the consolidated financial statements, the Group has not purchased or invested in any shares during the financial year ended 31 December 2025;

  • Note 9 to the consolidated financial statements discloses material related party transactions and balances, and the terms under which they were conducted;

  • As disclosed in note 1 to the consolidated financial statements, the Group made social contributions amounting to AED 8,616 thousand during the year ended 31 December 2025; and

  • Based on the information that has been made available to us, nothing has come to our attention which causes us to believe that the Group has contravened during the financial year ended 31 December 2025 any of the applicable provisions of the UAE Federal Decree Law No. (32) of 2021, or its Articles of Association which would materially affect its activities or its financial position as at 31 December 2025.

    To the Shareholders of Abu Dhabi National Oil Company for Distribution PJSC (continued)

    Report on Other Legal and Regulatory Requirements (continued)

    Further, as required by the ADAA Chairman Resolution No. 88 of 2021 regarding financial statements Audit Standards for the Subject Entities, we report, in connection with our audit of the consolidated financial statements for the year ended 31 December 2025, that nothing has come to our attention that causes us to believe that the Group has not complied, in all material respects, with any of the provisions of the following laws, regulations and circulars as applicable, which would materially affect its activities or the consolidated financial statements as at 31 December 2025:

  • Law No. 15 of 2017 concerning the Establishment of the Company which would materially affect its activities or its financial position; and

  • Relevant provisions of the applicable laws, resolutions and circulars organising the Group's operations.



GRANT THORNTON UAE

Dr. Osama El-Bakry Registration No: 935

Abu Dhabi, United Arab Emirates

2 February 2026

Consolidated statement of financial position

as at 31 December 2025

Note

31 December 2025

AED'000

31 December 2024

AED'000

Assets

Non-current assets

Property, plant and equipment

5

8,032,197

7,552,178

Right-of-use assets

10

1,445,804

1,726,351

Goodwill and intangible assets

6

621,853

599,307

Advances to contractors

36,596

47,656

Other non-current assets

12,824

14,447

Total non-current assets

10,149,274

9,939,939

Current assets

Inventories

7

1,574,254

1,619,887

Trade receivables and other current assets

8

2,632,515

2,935,982

Due from related parties

9

758,468

750,723

Term deposits

11

200,000

200,225

Cash and bank balances

11

2,360,854

2,734,038

Total current assets

7,526,091

8,240,855

Total assets

17,675,365

18,180,794

Equity and liabilities

Equity

Share capital

12

1,000,000

1,000,000

Treasury Shares

13

(10,479)

-

Statutory reserve

14

508,817

506,402

Other reserve

13

(257)

-

Foreign currency translation reserve

28

(271,698)

(298,268)

Retained earnings

2,004,040

1,783,705

Equity attributable to owners of the Company

3,230,423

2,991,839

Non-controlling interests

230,374

189,437

Total equity

3,460,797

3,181,276

Non-current liabilities

Lease liabilities

15

1,289,459

1,540,894

Borrowings

16

5,499,591

5,494,859

Provision for decommissioning

19

167,399

162,277

Provision for employees' end of service benefit

17

207,103

200,996

Deferred tax liability

27

79,090

80,064

Other non-current liabilities

6,528

6,516

Total non-current liabilities

7,249,170

7,485,606

Current liabilities

Lease liabilities

15

156,868

181,728

Trade and other payables

18

3,115,634

2,797,054

Due to related parties

9

3,646,512

4,439,345

Short term borrowings

16

46,384

95,785

Total current liabilities

6,965,398

7,513,912

Total liabilities

14,214,568

14,999,518

Total equity and liabilities

17,675,365

18,180,794



To the best of our knowledge, the financial information included in the report fairly present in all material respects the financial position, result of operations and cash flows of the Group as of 31 December 2025, and for the periods presented in the report.



Ali Siddiqi

Bader Saeed Al Lamki

Dr. Sultan Ahmed Al Jaber

Acting Chief Financial Officer

Chief Executive Officer

Chairman of the Board of Directors

Consolidated statement of profit or loss

For the year ended 31 December 2025

Note

31 December 2025

AED'000

31 December 2024

AED'000

Revenue

20

35,896,617

35,453,716

Direct costs

21

(28,950,827)

(29,237,684)

Gross profit

6,945,790

6,216,032

Distribution and administrative expenses

22

(3,323,546)

(3,194,942)

Other income

23

167,665

138,059

Impairment losses and other operating expenses

24

(284,305)

(90,254)

Operating profit

3,505,604

3,068,895

Interest income

71,274

143,893

Finance costs

26

(402,945)

(457,111)

Profit before tax

3,173,933

2,755,677

Income tax expense

27

(322,891)

(283,394)

Profit for the year

2,851,042

2,472,283

Attributable to:

Equity holders of the Company

2,794,000

2,420,275

Non-controlling interests

57,042

52,008

2,851,042

2,472,283

Basic and diluted earnings per share

29

0.224

0.194

Consolidated statement of comprehensive income

For the year ended 31 December 2025

Note

31 December 2025

31 December 2024

AED'000

AED'000

Profit for the year

2,851,042

2,472,283

Items that may be reclassified to profit or loss

Exchange differences on translation of foreign operations

38,361

(427,100)

Other comprehensive (income)/loss for the year

38,361

(427,100)

Total comprehensive income for the year

2,889,403

2,045,183

Attributable to:

Equity holders of the Company

2,820,570

2,125,002

Non-controlling interests

68,833

(79,819)

2,889,403

2,045,183



ABU DHABI NATIONAL OIL COMPANY FOR DISTRIBUTION PJSC

Consolidated statement of changes in equity For the year ended 31 December 2025

Share capital

Treasury Shares

Statutory reserve

Other reserve

Foreign currency translation

reserve

Retained earnings

Equity attributable to equity holders of the parent

Noncontrolling

interest Total Equity

AED'000 AED'000 AED'000 AED'000 AED'000 AED'000 AED'000 AED'000 AED'000

Balance as at 1 January 2024 (audited) 1,000,000 - 503,921 - (2,995) 1,971,140 3,472,066 323,767 3,795,833

Adjustments of IAS 21 amendments - - - - - (33,979) (33,979) (33,982) (67,961)

Adjusted Balance as at 1 January 2024 1,000,000 - 503,921 - (2,995) 1,937,161 3,438,087 289,785 3,727,872

Profit for the year - - - - - 2,420,275 2,420,275 52,008 2,472,283

Transfer to statutory reserve - - 2,481 - - (2,481) - - -Other comprehensive loss for the year - - - - (295,273) - (295,273) (131,827) (427,100) Dividends declared (note 33) - - - - - (2,571,250) (2,571,250) - (2,571,250) Dividends declared by subsidiary - - - - - - - (20,529) (20,529) Balance as at 31 December 2024 1,000,000 - 506,402 - (298,268) 1,783,705 2,991,839 189,437 3,181,276

1,000,000

-

-

-

-

-

-

-

-

-(10,479)

-

506,402

-2,415

-

-

-

-

-

-

-(257)

-

(298,268) 1,783,705

- 2,794,000

- (2,415)

26,570 -

- -

- (2,571,250)

2,991,839

2,794,000

-26,570

(10,736)

(2,571,250)

189,437 3,181,276

57,042 2,851,042

- -

11,791 38,361

- (10,736)

- (2,571,250)

Balance as at 1 January 2025 (audited)

Profit for the year

Transfer to statutory reserve

Other comprehensive income for the year Own shares acquired (note 13)

-

-

-

-

1,000,000

(10,479)

508,817

(257)

-

-

-

(271,698)

2,004,040

3,230,423

(27,896)

(27,896)

3,460,797

230,374

Dividends declared (note 33) Dividends declared by subsidiary Balance as at 31 December 2025

Consolidated statement of cash flows For the year ended 31 December 2025

Cash flows from operating activities Profit for the year before tax Adjustments for:

Depreciation of property, plant and equipment Depreciation of right-of-use assets Amortization of intangible assets

Impairment losses on receivables Recoveries on receivables

Employees' end of service benefit charge

Gain on disposal of property, plant and equipment and modifications of right-of-use assets

Impairment of property, plant and equipment Finance costs

Interest income

Provisions/write-offs for inventories

Operating cash flows before movements in working capital

Decrease/(increase) in inventories

Decrease in trade receivables and other current assets (Increase)/decrease in due from related parties Increase in trade and other payables

Decrease in due to related parties

Cash generated from operating activities Payment of employees' end of service benefit Payment of income taxes

Net cash generated from operating activities

Cash flows from investing activities

Payments for purchases of property, plant and equipment Payments for advances to contractors

Proceeds from disposal of property, plant and equipment

Proceeds from term deposits with maturity more than three months Interest received

Net cash used in investing activities

Cash flows from financing activities

Payment of lease liabilities

Net (payments for)/proceeds from short term borrowings Repayment of borrowings

Own shares acquired Dividends paid Finance cost paid

Net cash used in financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Effect of foreign exchange rate changes

Cash and cash equivalents at the end of the year

Non-cash transactions

Accruals for property, plant and equipment

Advances to contractors transferred to property, plant and equipment Additions to right of use assets for land leases

Finance cost related to provision for decommissioning

31 December

2024

AED'000 2,755,677

602,186

151,669

31,952

55,237

(19,874)

31,157

(8,467)

5,748

457,111

(143,893)

5,035

3,923,538

(368,020)

508,349

34,966

229,946

(351,508)

3,977,271

(23,583)

(22,235)

3,931,453

(1,116,830)

(62,403)

23,264

-143,893

(1,012,076)

(208,300)

97,996

(1,284)

-(2,613,700)

(355,264)

(3,080,552)

(161,175)

2,993,937

(98,724)

2,734,038

517,652

53,213

158,427

5,955

15

31 December

2025

AED'000

3,173,933

594,222

151,000

30,724

232,431

(4,615)

36,141

(43,051)

2,812

402,945

(71,274)

5,328

4,510,596

41,218

80,363

(7,745)

388,634

(792,833)

4,220,233

(29,965)

(268,227)

3,922,041

(1,180,747)

(26,647)

5,900

225

73,454

(1,127,815)

(201,454)

(58,901)

(859)

(10,479)

(2,599,146)

(302,878)

(3,173,717)

(379,491)

2,734,038

6,307

2,360,854

376,775

37,707

42,315

5,898

Notes to the Consolidated financial statements for the year ended 31 December 2025

  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.

    On 11 September 2025, Abu Dhabi National Oil Company ("ADNOC", "Ultimate Shareholder", or the "Parent Company") transferred its equity in the Company to XRG P.J.S.C. ("XRG"), ADNOC's wholly-owned international energy investment company, through an off-market transfer on the ADX. ADNOC continues to retain 77% of the ultimate ownership and control through its 100% stake in XRG. The transfer does not impact ADNOC Distribution's operations.

    In May 2021, ADNOC also issued approximately USD 1.195 billion of senior unsecured bonds due 2024, exchangeable into existing shares of ADNOC Distribution under certain conditions, constituting approximately 7% of the Company's registered share capital. In 2024, ADNOC redeemed fully all the unsecured bonds through cash payment.

    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 Gulf Cooperating Council (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.

    The Group has not purchased or invested in any shares during the financial year ended 31 December 2025.

    The Group made social contributions amounting to AED 8,616 thousand during the year ended 31 December 2025 (2024: AED 3,981 thousand).

    Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

  2. Application of new and revised IFRS Accounting Standards Standards (IFRS)

    The following new and revised IFRSs, which became effective for annual periods beginning on or after 1 January 2025, have been applied in these consolidated financial statements:

    • Amendments to IAS 21 - Lack of Exchangeability

      An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency that is not exchangeable into another currency at a measurement date for a specified purpose. A currency is exchangeable when there is an ability to obtain the other currency (with a normal administrative delay), and the transaction would take place through a market or exchange mechanism that creates enforceable rights and obligations. In 2024, the Group has early adopted amendments to IAS 21 in relation to operations of its subsidiary based in Egypt.

      New and amended IFRS Standards in issue but not yet effective and not early adopted

    • IFRS 18 Presentation and Disclosure in Financial Statements

      IFRS 18 includes requirements for all entities applying IFRS for the presentation and disclosure of information in financial statements. IFRS 18 was issued in April 2024 and applies to an annual reporting period beginning on or after 1 January 2027. The Group is currently working to identify all of the impacts that IFRS 18 will have on the Consolidated financial statements.

    • Amendment to IFRS 9 and IFRS 7 - Classification and measurement of financial instruments

    The amendments address matters identified during the post-implementation review of the classification and measurement requirements of IFRS 9 Financial Instruments. These amendments were issued in May 2024 and applies to an annual reporting period beginning on or after 1 January 2026.

    Management anticipates that these new standards and amendments will be adopted in the Group's consolidated financial statements as and when they are applicable and adoption of these new standards and amendments, may have no material impact on the consolidated financial statements of the Group in the period of initial application.

  3. Summary of material accounting policies

    1. Statement of compliance

      These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards (IFRS) as issued by International Accounting Standard Board (IASB) and comply with the requirements of applicable laws in UAE.

    2. Basis of preparation

      The consolidated financial statements are presented in UAE Dirhams (AED), which is the Company's functional currency and the Group's presentation currency. All values are rounded to the nearest thousands (AED'000) except when otherwise indicated.

      These consolidated financial statements have been prepared on a historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

      The Group has prepared the financial statements on the basis that it will continue to operate as a going concern.

    3. Basis of Consolidation

      The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company:

      • Has power over the investee

      • Is exposed, or has rights, to variable returns from its involvement

      • Has the ability to use its power to affect its returns

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

  1. Summary of material accounting policies (continued)

    1. Basis of Consolidation (continued)

      When the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

      • The size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders

      • Potential voting rights held by the Company, other vote holders or other parties

      • Rights arising from other contractual arrangements

      • Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings

        Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date the Company gains control until the date when the Company ceases to control the subsidiary.

        Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group's accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

        Non-controlling interests

        Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. Those interests of noncontrolling shareholders that are present ownership interests entitling their holders to a proportionate share of net assets upon liquidation may initially be measured at fair value or at the non-controlling interests' proportionate share of the fair value of the acquiree's identifiable net assets. The choice of measurement is made on an acquisition by-acquisition basis. Other non-controlling interests are initially measured at fair value. Subsequent to acquisition, the carrying amount of noncontrolling interests is the amount of those interests at initial recognition plus the noncontrolling interests' share of subsequent changes in equity.

        Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

        Details of the Company's significant subsidiaries and effective ownership interest are given below:

        Name of Subsidiary Ownership interest Country of

        2025

        2024

        ADNOC Distribution

        Global Company LLC 100%

        100%

        Commercial agencies, commercial

        U.A.E. enterprises, retail and distribution,

        investment, institution and

        ("ADGC LLC")

        management

        Performing marketing activities and distribution of petroleum products,

        Total Energies Marketing 50%

        50%

        Egypt motor oils, fuels and specialties.

        Constructing, owning, and operating

        incorporation

        Principal activities

        Egypt LLC

        catering and cafeterias through service stations.

        The Group owns 50% interest in Total Energies Marketing Egypt LLC through its indirect subsidiary ADNOC Distribution Egypt Holding RSC Limited, a wholly owned entity of ADGC LLC.

        Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

        3. Summary of material accounting policies (continued)

    2. Business combinations

      Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

      At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:

      • Deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively

      • Liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 at the acquisition date (see below)

      • Assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard

        When the consideration transferred by the Group in a business combination includes a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the 'measurement period' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

        The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Other contingent consideration is remeasured to fair value at subsequent reporting dates with changes in fair value recognised in profit or loss.

        If the initial accounting for a business combination is incomplete by the end of the reporting year in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.

    3. Goodwill

Goodwill is initially recognised and measured at cost being the excess of the aggregate of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed (as set out above). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assess whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill acquired in a business combination is, from acquisition date, allocated to each of the Group's cash generating units (or groups of cash-generating units) that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Cash generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired.

Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

3. Summary of material accounting policies (continued)

  1. Goodwill (continued)

    If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in subsequent period. On disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

  2. Intangible assets

    Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition and are recognised separately from goodwill. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

    The useful lives of intangible assets are assessed as either finite or indefinite.

    Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss in the expense category that is consistent with the function of the intangible assets.

    Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

    An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of profit or loss.

    The group amortises intangible assets with a finite useful life, using the straight-line method over the following periods:

    Customer contracts 5-15 years

    Computer software 3-5 years

    Customer contracts

    Customer contracts have a finite useful life and are carried at cost less accumulated amortisation and impairment and mainly represent long term non-cancellable contracts with customers.

    Computer software

    Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software.

    Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

    3. Summary of material accounting policies (continued)

  3. Impairment of non-financial assets

    At each reporting date, the Group reviews the carrying amounts of its intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

    Intangible assets with an indefinite useful life are tested for impairment at least annually and whenever there is an indication at the end of a reporting period that the asset may be impaired. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. In determining fair value less costs of disposal, recent market transactions are taken into account.

    If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

    Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss to the extent that it eliminates the impairment loss which has been recognised for the asset in prior years.

    Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

  4. Taxes Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

  1. Summary of material accounting policies (continued)

    1. Taxes (continued) Deferred tax

      Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

      Deferred tax liabilities are recognised for all taxable temporary differences, except:

      • When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

      • In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

        Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

      • When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

      • In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

        The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

        In assessing the recoverability of deferred tax assets, the Group relies on the same forecast assumptions used elsewhere in the financial statements and in other management reports, which, among other things, reflect the potential impact of climate-related development on the business, such as increased cost of production as a result of measures to reduce carbon emission. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

        Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

        Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognised in profit or loss.

        The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

        Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

        3. Summary of material accounting policies (continued)

    2. Foreign currencies

      In preparing the financial statements of the Group entities, transactions in currencies other than the Group's functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Nonmonetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

      Exchange differences are recognised in profit or loss in the year in which they arise except for:

      • Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings

      • Exchange differences on transactions entered into to hedge certain foreign currency risks

      • Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on disposal or partial disposal of the net investment

        For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in a foreign currency translation reserve (allocated proportionately to owners of the company and non-controlling interest).

        On the disposal of a foreign operation, all of the exchange differences accumulated in a foreign currency translation reserve in respect of that operation attributable to the owners of the Company are reclassified to profit or loss. In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are reattributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

        Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.

    3. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the assets.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amounts of replaced parts are derecognised. All other repairs and maintenance costs are charged to the profit or loss during the financial period in which they are incurred.

The Group has revised the estimated useful lives of its assets, currently classified as property, plant and equipment with a carrying value of AED 5,347,053 thousand. This change in estimate has been applied in current year and prospectively and resulted in a lower depreciation charge by AED 90,917 thousand during the year ended 31 December 2025.

Depreciation is calculated using the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

2025 2024

Buildings 15 - 50 years 15 - 30 years

Plant and machinery 5 - 30 years 5 - 30 years

Motor vehicles 5 - 20 years 5 - 20 years

Furniture, fixtures and computer equipment 4 - 15 years 5 - 10 years

Pipelines 10 - 50 years 10 - 40 years

Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

3. Summary of material accounting policies (continued)

  1. Property, plant and equipment (continued)

    The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within profit or loss.

    Land was historically provided by the Government of Abu Dhabi for no consideration and is accounted for at a nominal value of AED 1 per plot of land. In order to continue to comply with property ownership laws in the UAE, the Group's real estate properties portfolio was transferred to ADNOC pursuant to decisions of the Crown Prince of Abu Dhabi and the Rulers of the Northern Emirates. To allocate liabilities associated with the property transfers, and to ensure the Group has continued access to the properties, the Group entered into Real Estate Transfer Liability and Leaseback Agreements with ADNOC. Under the terms of the Real Estate Transfer Liability and Leaseback Agreements, ADNOC has agreed to lease all real estate transferred to it back to the Group on a cost-pass-through basis. Each lease has a term of four years and will renew automatically unless notice of termination is given by the Group at least one year prior to then-effective expiration date. Under the terms of the agreements, the Group will indemnify ADNOC for any environmental liabilities relating to its operations on the properties.

  2. Capital work-in-progress

    Capital work-in-progress is included in property, plant and equipment at cost. Capital work-in-progress is transferred to the appropriate asset category and depreciated in accordance with the Group's policies when construction of the asset is completed and the asset is commissioned and available for use.

  3. Inventories

    Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average cost method. The cost of finished goods and work in progress comprises raw materials, consumables, spare parts, direct labour and materials and related overheads (based on normal operating capacity). Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and costs necessary to make the sale.

  4. Impairment of tangible assets

    At the end of each reporting period, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash generating units for which a reasonable and consistent allocation basis can be identified.

    The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

    If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

    Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

    Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

    3. Summary of material accounting policies (continued)

  5. Financial instruments

    Financial assets and financial liabilities are recognised in the Group's consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

    Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the statement of profit or loss.

  6. Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

Amortised cost

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance.

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on trade receivables and due from related parties. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Group always recognises lifetime ECL for trade receivables, contract assets and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

  1. Summary of material accounting policies (continued)

    3.15 Financial Assets (continued) Impairment of financial assets (continued)

    1. Significant increase in credit risk

      In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.

      For financial guarantee contracts, the date that the Group becomes a party to the irrevocable commitment is considered to be the date of initial recognition for the purposes of assessing the financial instrument for impairment. In assessing whether there has been a significant increase in the credit risk since initial recognition of a financial guarantee contracts, the Group considers the changes in the risk that the specified debtor will default on the contract.

      The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.

      The Group assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial instrument is determined to have low credit risk if:

      1. the financial instrument has a low risk of default;

      2. the borrower has a strong capacity to meet its contractual cash flow obligations in the near term; and

      3. adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.

    2. Definition of default

      The Group employs statistical models to analyse the data collected and generate estimates of probability of default ("PD") of exposures with the passage of time. This analysis includes the identification for any changes in default rates and changes in key macro-economic factors across various geographies of the Group.

    3. Credit-impaired financial assets

      A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events:

      1. significant financial difficulty of the issuer or the borrower;

      2. a breach of contract, such as a default or past due event (see (ii) above);

      3. the lender(s) of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;

      4. it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or

      5. the disappearance of an active market for that financial asset because of financial difficulties.

        Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

        1. Summary of material accounting policies (continued)

          1. Financial Assets (continued) Impairment of financial assets (continued)

    4. Write-off policy

      The Group writes off a financial asset when there is information indicating that the counterparty is in severe financial difficulty and there is no realistic prospect of recovery.

    5. Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this is represented by the assets' gross carrying amount at the reporting date; for financial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected to be drawn down in the future by default date determined based on historical trend, the Group's understanding of the specific future financing needs of the debtors, and other relevant forward-looking information.

For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.

The Group has elected the IFRS 9 simplified approach to measure loss allowance for cash and bank balances, trade and other receivables, and due from related parties at an amount equal to lifetime ECLs. Accordingly, trade receivables which are not credit impaired and which do not have significant financing component is categorised under stage 2 and lifetime ECL is recognised.

Expected credit losses related to cash and bank balances, trade receivables and due from related parties are presented in the statement of profit or loss.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as at fair value through other comprehensive income (FVTOCI), the cumulative gain or loss previously accumulated in the investment's revaluation reserve is reclassified to profit or loss. In contrast, on derecognition of an investment in equity instrument which the Group has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings.

  1. Financial liabilities

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value through profit or loss (FVTPL).

Financial liabilities at FVTPL

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on changes in fair value recognised in the consolidated statement of profit or loss to the extent that they are not part of a designated hedging relationship. The net gain or loss recognised in the consolidated statement of profit or loss incorporates any interest paid on the financial liability.

Notes to the consolidated financial statements for the year ended 31 December 2025 (continued)

3. Summary of material accounting policies (continued)

3.16 Financial liabilities (continued) Financial liabilities at FVTPL (continued)

However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in statement of other comprehensive income, unless the recognition of the effects of changes in the liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in statement of profit or loss. The remaining amount of change in the fair value of liability is recognised in statement of profit or loss. Changes in fair value attributable to a financial liability's credit risk that are recognised in statement of other comprehensive income are not subsequently reclassified to statement of profit or loss; instead, they are transferred to retained earnings upon derecognition of the financial liability.

Gains or losses on financial guarantee contracts issued by the Group that are designated by the Group as at FVTPL are recognised in profit or loss.

Financial liabilities measured subsequently at amortised cost

Financial liabilities that are not designated as FVTPL, are measured subsequently at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.

Offsetting

Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Company analysis

Earlier from Abu Dhabi National Oil Company For Distribution

All Abu Dhabi National Oil Company For Distribution news releases