News Column

TAQA back to profitability in the second quarter

August 13, 2014

Alexander Cornwell Staff Reporter



Dubai

Abu Dhabi National Energy Company (Taqa), the state-owned energy company, bounced back to profitability in the second quarter driven by record oil and gas production and a "more disciplined approach to capital expenditure."

Taqa, 75 per cent owned by the Abu Dhabi government, posted a net profit of Dh239 million ($65 million) for the three months ending June 30 compared with a loss of Dh172 million for the same period a year earlier, the company said in a statement on Wednesday.

Revenue for the second quarter was Dh6.52 billion compared to Dh5.86 billion in the same period a year earlier.

The results mark Ed LaFehr's first quarter in charge in the newly created chief operating officer role after chief executive Carl Sheldon stepped down earlier this year.

"We have achieved record performance during the first half of the year," LaFehr said in a conference call on Wednesday.

The latest quarter saw a pivot in strategy with a Taqa led consortium pulling out of plans to buy two power plants in the north Indian state of Himachal Pradesh. On Wednesday, the company announced it had also dropped out of negotiations to take a stake in the Sulaymaniyah power station in the Kurdistan region of Iraq.

Last week, Taqa suspended operations at the Atrush Block in Kurdistan, citing "escalating instability." LaFehr said operations had been going "smoothly" prior to the suspension and that Taqa is now "preparing various scenarios" that would enable it to resume operations once the "security situation has stabilised."

For the first six months of the year Taqa posted a Dh513 million profit, up from a Dhh66 million loss in the first half of 2013. Half-year revenue was Dh13.78 billion compared to Dh11.28 billion a year earlier.

Taqa saw record oil and gas production levels in the first half of the year, averaging 158,000 barrels of oil equivalent per day (boe/d), a 24 per cent increase against the first half of 2013, the company said.

Taqa said it does not intend to return to the bond market until 2017, at the earliest and in April, it refinanced a $1.2 billion bond.

Stephen Kersley, chief financial officer, said on Wednesday the company had access to $5.1 billion in liquidity, including $1.1 billion in cash, as of June 30.

Taqa shares finished up 2.75 per cent to Dh1.12 on the Abu Dhabi Securities (ADX) on Wednesday.


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Source: Gulf News (United Arab Emirates)


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