ADNOC Gas Q1 2025 net income rises 7% to $1.27bn as LNG deals and index eligibility drive growth

Abu Dhabi-listed ADNOC Gas plc reported net income of $1.27 billion for Q1 2025, a 7% increase year-on-year, as the company outperformed market expectations on the back of resilient domestic demand, strategic LNG supply agreements, and efficient operational execution. EBITDA for the quarter stood at $2.16 billion, reflecting a 4% increase versus the same quarter in 2024.

Revenue reached $6.099 billion, up 1% year-on-year, while operating expenses declined 8% to $485 million, resulting in an EBITDA margin of 35.4%. Net income margin also improved to 20.8%, an increase of over 100 basis points year-on-year. Free cash flow, excluding working capital, rose to $1.214 billion—a 6% year-on-year and 26% sequential increase.

These results mark a continuation of ADNOC Gas‘s strategic plan to deliver long-term earnings and operational growth, building on its 2023 IPO and its positioning as one of the world’s largest integrated gas processing companies. The latest figures also support the UAE’s broader economic diversification and energy monetisation goals amid a lower oil price environment.

What Factors Drove ADNOC Gas’s Operational Performance?

The company attributed its earnings growth primarily to strong domestic gas demand in the UAE, supported by continued expansion in the nation’s power, industrial, and commercial sectors. This demand uptick led to higher processed and sold gas volumes across its network.

Operationally, ADNOC Gas optimised its planned shutdown program, resulting in fewer offline days and greater throughput across key facilities. The reduced downtime contributed significantly to EBITDA growth and supported margin improvements across core processing units.

CEO Fatema Al Nuaimi said the results “significantly exceeded market expectations,” and emphasised that the company remains focused on long-term EBITDA growth of over 40% between 2023 and 2029.

What Role Did LNG Supply Agreements Play in Q1 Results?

In Q1 2025, ADNOC Gas executed multi-year LNG supply contracts valued at nearly $9 billion with Indian Oil Corporation and Japan’s JERA Global Markets. These agreements expand the company’s international customer base and reinforce its strategic role in the global LNG trade as a reliable, lower-carbon fuel provider.

The long-term contracts ensure stable revenue streams and align with the global shift toward cleaner energy sources. These agreements not only strengthen bilateral energy ties with India and Japan but also position ADNOC Gas to capitalise on Asia’s growing demand for transitional fuels.

This development comes at a time when LNG is gaining traction as a bridge fuel in many countries’ decarbonisation roadmaps. ADNOC Gas’s ability to secure large-volume LNG deals supports investor confidence in its revenue stability and international relevance.

How Is ADNOC Gas Investing for Future Growth?

ADNOC Gas increased capital expenditures by 43% year-on-year in Q1 as it continues to invest through the commodity cycle. The company remains focused on expanding infrastructure and enhancing production capacity to support medium-term EBITDA targets.

A critical part of this investment strategy is the Rich Gas Development project, which remains on track with a Final Investment Decision expected in 2025. This project is expected to boost ADNOC Gas’s ability to process and market higher-value gas streams and support its long-term growth strategy.

The company’s CAPEX plans align with ADNOC Group’s broader strategy of transitioning to cleaner fuels and diversifying its energy portfolio while maintaining strong cash flow and shareholder returns.

Is ADNOC Gas Eligible for MSCI and FTSE Index Inclusion?

Following its secondary offering in February 2025, ADNOC Gas increased its free float from 5% to 9%, satisfying the minimum criteria for potential inclusion in key global indices. The $3 billion marketed offering of 3.1 billion shares was oversubscribed 4.4 times, highlighting robust institutional demand.

As a result, ADNOC Gas could be added to the MSCI Emerging Markets Index by June and the FTSE Global Equity Index Series by September. Index inclusion typically leads to passive fund inflows, increased liquidity, and improved visibility among international institutional investors.

Market analysts view index inclusion as a potential catalyst for upward re-rating of the stock, given the additional exposure it brings to global investment portfolios focused on energy transition assets.

How Has ADNOC Gas Stock Performed After Q1 Results?

As of early May 2025, ADNOC Gas shares were trading at approximately AED 3.17 on the Abu Dhabi Securities Exchange (ADX), registering a 0.63% gain following the earnings release. While modest, the increase reflects investor optimism about the company’s strong fundamentals and future growth prospects.

Trading volumes have increased steadily since the February secondary offering, with both retail and institutional investors contributing to liquidity. Market watchers attribute this to heightened visibility, stable dividends, and anticipation of index-driven capital flows in the coming quarters.

What Is the Institutional Sentiment Around ADNOC Gas?

Investor sentiment remains broadly positive, supported by strong earnings, strategic LNG expansion, and clarity around capital allocation. The February offering saw significant participation from sovereign wealth funds, European pension funds, and long-only Asia-based institutions.

Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) have been active in recent weeks, particularly following index inclusion announcements. Analysts report that FIIs account for a growing share of total volume, drawn by ADNOC Gas’s dividend profile, energy security theme, and exposure to the GCC’s growth markets.

The company’s record $3.41 billion dividend declared for FY2024 has also played a major role in attracting income-seeking portfolios. This dividend level is expected to be sustained, barring macroeconomic shocks, according to analyst coverage from regional brokerages.

Should Investors Buy, Sell or Hold ADNOC Gas Shares?

Analysts covering ADNOC Gas maintain a “Buy” recommendation, based on its predictable cash flows, strategic positioning in the LNG sector, and strong dividend payouts. The company’s integrated model—from upstream gas gathering to downstream LNG marketing—offers operational and financial flexibility.

The investment case is further strengthened by the UAE’s long-term focus on gas as a transitional fuel, making ADNOC Gas a key player in regional and global decarbonisation efforts.

However, analysts also note that global LNG prices, geopolitical tensions in energy corridors, and execution timelines for projects like Rich Gas Development could pose short-term risks. Therefore, while long-term investors may see continued value, traders may prefer to watch for market entry points based on broader energy price movements.

What Is the Future Outlook for ADNOC Gas?

Looking ahead, ADNOC Gas is expected to continue expanding its LNG export footprint and invest in infrastructure that supports both regional and global energy transitions. The company’s EBITDA growth target of over 40% between 2023 and 2029 remains intact, anchored by stable revenues, operational discipline, and strategic CAPEX.

Analysts expect further announcements related to new LNG supply deals and project milestones, particularly as ADNOC Group accelerates plans to monetise gas resources and support the UAE’s Net Zero 2050 Strategy.

With its strong balance sheet, growing institutional base, and index inclusion tailwinds, ADNOC Gas remains one of the most closely watched energy companies on the ADX. The next key catalyst for the stock could be confirmation of MSCI inclusion and updates on the Rich Gas Development timeline.

As energy markets continue to recalibrate in favour of cleaner fuels and secure supply chains, ADNOC Gas is positioned to emerge as a long-term beneficiary of structural demand for low-carbon natural gas.