News Column

Taqa records Dh513 million first-half profit

August 14, 2014



The state-owned oil explorer and power supplier said the half year performance shows swing back from a loss of Dh66 million in the same 2013 period, delivering earnings of 9 fils per share.



Abu Dhabi National Energy Company, or Taqa, announced on Wednesday a net profit of Dh513 million for the first half of 2014.







The state-owned oil explorer and power supplier said the half year performance shows swing back from a loss of Dh66 million in the same 2013 period, delivering earnings of 9 fils per share.







For the second quarter, driven by higher oil and gas production, Taqa reported a net profit of Dh239 million compared with a loss of Dh172 million a year earlier. Revenues from oil and gas in the second quarter jumped 47 per cent to Dh3.08 billion due to higher production in Britain and North America as well as to the favourable impact of commodity prices, the company said in a statement.







Taqa said it had pulled out of acquisition plans in India and Iraq to improve cash flow and reduce debt leverage.







The company said it achieved record oil and gas production, generating almost 158,000 barrels of oil per day (boe/d) during the period, representing a 24 per cent increase against the first half of 2013.







Taqa's production growth and high North American gas prices helped raise its underlying revenues to Dh11.3 billion, up 29 per cent year-on-year, and resulted in the company's highest ever EBITDA of Dh7.9 billion, up 42 per cent compared with the first half of 2013.







"As a result of group strategy changes and a re-organisation, which was announced in May 2014, TAQA maintained its existing operating expenditure levels, while achieving higher production, despite an escalating cost environment," the company said. General and administrative costs were reduced by 15 per cent year-on-year.







The shelving of acquisition plans in India and Iraq confirms a shift in strategy for the company, which has been an active foreign investor with assets around the world including North Sea oil production facilities and power plants in India, Ghana and Morocco. A consortium led by Taqa pulled out of plans to buy two power plants in the north Indian state of Himachal Pradesh from Jaiprakash Power Ventures for $1.6 billion last month, citing a change in the company's business strategy.







On Wednesday the company said it had also ended negotiations to acquire a 50 per cent interest in the 1,000 MW Sulaymaniyah power plant in the Kurdistan region of Iraq.







"We have rebalanced our growth agenda and the acquisition no longer fits our strategy," a Taqa spokesman was quoted as saying.







"The withdrawal is expected to improve free cash flow, reduce debt leverage over time and deliver a stronger sustainable financial performance," he added.







However, Taqa remains committed to its existing India operations and will continue developing its oil and gas operations in the Atrush block in Iraq'sKurdistan region, although it suspended its operations there this month due to the escalating political instability.







Taqa said it has no plans to tap the bond market before 2017 and expects to pay 2016 maturities from improved operational cash flow and asset sales.







TAQA has available liquidity of $5 billion at the end of June, including $1.1 billion of cash in hand. Taqa shares jumped 4.6 per cent after the results, trimming their year-to-d-ate decline to 24.5 per cent.







With agency inputs.?




For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Khaleej Times (United Arab Emirates)


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters