Taqa reports Dhs13 billion revenues in nine months

Business Bureau, Gulf Today

Abu Dhabi National Energy Company (Taqa), a leading global energy company headquartered in Abu Dhabi with operations in 11 countries, announced on Thursday its financial results and operational highlights for the nine-month period ended September 30, 2019.

Taqa recorded steady revenues of Dhs13.1 billion for the period, a slight decrease of 3% compared to the corresponding period in 2018. Revenues for the Power and Water segment remained stable at Dhs8.7 billion and were 9% lower at Dhs4.4 billion for the Oil and Gas segment due to lower volumes and realized prices in Europe. Global power technical availability averaged 94.5% with oil and gas production up 1% to 123,322 barrels of oil equivalent per day (boepd).

The Group also reported Dhs7.0 billion in EBITDA, a 5% reduction compared to the previous year, mainly driven by lower revenue along with reduced income from associates due to one-off insurance proceeds at Sohar Aluminium in 2018.

The Group’s overall capex marginally increased to Dhs1,221 million for the period, consistent with 2018 spend. Power and Water capex was focused on regular maintenance work predominantly across the UAE fleet, while Oil & Gas capex included bringing new wells on stream at Taqa Atrush and carrying out debottlenecking work to increase the capacity of volumes that can be handled by the production facility. Taqa’s entitlement production has now reached 6,345 boepd for the nine month period ended 30 September 2019, a 102% increase from 2018. Contributions to both revenues and EBITDA from the Atrush asset have increased significantly, up 95% and 106% respectively to Dhs357 million and Dhs222 million.

Consolidated net profit was negatively impacted by unfavorable mark-to-market movements generated by an energy price reduction and the reimplementation of the regional greenhouse gas initiative in New Jersey which impacted Red Oak, the Group’s US-based power asset. This was offset by positive movements in foreign exchange gains which were realized as a result of a weaker Euro and a reduction in current tax charges due to the decrease in taxable income within the Oil and Gas segment. Therefore, the consolidated net income fell 21% to Dhs925 million with Taqa’s share of net profits down 54% to Dhs198 million compared to the nine-month period last year.

Taqa’s liquidity as of 30 September 2019 remained strong at Dhs11.2 billion, including Dhs2.2 billion in cash and cash equivalents and Dhs8.9 billion of undrawn credit facilities. This reflected September’s redemption at maturity of Taqa’s $500 million bond carrying a 6.250% coupon that was later refinanced in early-October with a new bond of the same value, carrying a reduced coupon of 4.000% and due for repayment in 2049. The Group continued its substantial progress in reducing debt, with a decrease of Dhs3.0 billion over the last nine months, which brings the Groups debt to Dhs63.3 billion at the end of the period.

Commenting on the year-to-date performance, Saeed Mubarak Al Hajeri, Chairman of Taqa, said: “Taqa’s results for the first nine months of 2019 come amid headwinds for the hydrocarbon industry and continue to be bolstered by strong and stable performance in our Power and Water business. In addition, the Group continues to reduce its debt position while maintaining strong liquidity. Our recent 30-year bond issuance and the overwhelming demand seen from investors is testament to the stability of our overall business. Moving forward, we remain positive about greater opportunities to grow our power generation and water desalination business to achieve sustained growth.”

Taqa CEO, Saeed Al Dhaheri, added: “In the first nine months of the year, Taqa had strong performance by the UAE fleet resulting in an increased availability to help meet power and water demands. Our oil and gas business was boosted by our increased production at KRI’s Atrush, which currently stands at 45,000 barrels of oil per day, as well as increased revenues from our gas storage facilities in the Netherlands.”

Taqa will have 10 per cent of its portfolio generated from renewable energy sources by 2030, as it looks to expand its footprint in the Middle East, North and sub-Saharan Africa, said a senior official recently.

Taqa, which has utilities regulator Abu Dhabi Water and Electricity Authority as a majority stakeholder, had a profitable 2018 on the back of improved commodity prices. The energy company, which has investments in North America, Europe and Iraq, swung to a Dh153 million profit in the third quarter of 2018, recouping from a loss of Dh194m in the year-earlier period.