Abu Dhabi National Energy Company “TAQA” has reported strong financial results for the first quarter of this year for the period ending March 31, 2023.
TAQA’s performance in the quarter was driven by strong and steady returns from its long-term contracting business in the utility sector, in addition to one-time gains resulting from TAQA’s acquisition of a 5% stake in ADNOC Gas.
Net income (TAQA share) was 11.6 billion dirhams, an increase of 9.6 billion dirhams. This increase was mainly due to a one-time gain resulting from the acquisition of 5% stake in ADNOC Gas.
In the first quarter of this year, the group achieved a revenue of 13.1 billion dirhams, which is 6% higher compared to the same period last year.
The increase was mainly driven by an increase in wholesale distribution charges and charges related to the use of the transmission network in the transmission and distribution sector.
Earnings before interest, taxes, depreciation and amortization were 5.3 billion dirhams, down 5%.
Capital expenditure was 1.1 billion dirhams, up 26% compared to the same period last year, and free cash flows were 4.3 billion dirhams, up 31% compared to the same period last year, despite the increase. In capital expenditure.
After the strategic decision to maintain TAQA’s business in the oil and gas sector, shareholders approved a new policy for distribution of cash dividends for the years 2023-2025 at the annual general meeting held last March.
Under this new policy, fixed cash dividends of 3.25 fils per share in 2023, 3.50 fils per share in 2024 and 3.75 fils per share in 2025 will be distributed on a quarterly basis.
As for variable cash dividends, they are distributed once a year and are assessed according to a specified percentage of the annual net profit of the Group’s business in the oil and gas sector. TAQA and Abu Dhabi National Oil Company (ADNOC) have been linked to an extended strategic partnership, established by the two companies concluding several agreements, the most important of which was the recent participation in ownership (with Mubadala Investment Company). ADNOC’s offshore operations are valued at $3.8 billion, in addition to a stake in Abu Dhabi Future Energy Company (Mastar), a carbon offsetting project.
Based on this firm partnership, TAQA received from ADNOC a 5% share in the total issued capital of ADNOC Gas, without any cash consideration for this share. ADNOC Gas was listed on the Abu Dhabi Stock Exchange in the first quarter of 2023, and the stake is a valuable financial asset for TAQA.
Additionally, TAQA’s net income is expected to increase, with ADNOC Gas benefiting from distributed profits. According to the announced policy for profit distribution in “ADNOC Gas”, “TAQA” expects to earn a profit of 298 million dirhams in 2023, and increase to 611 million dirhams in 2024.
Regarding the most important operational achievements, the availability ratio in electricity and water transmission networks reached 98.1%, a slight increase compared to the 98% recorded in the same period last year.
The commercial availability rate in the power generation business worldwide reached 98.8%, compared to 97.3% recorded in the same period last year, this increase was achieved mainly as a result of the contribution of plants in the United Arab Emirates.
Average oil and gas production decreased by 119.9 thousand barrels of oil equivalent per day, which is a decrease of 5.52% compared to the same period in 2022.
The decrease was mainly due to a natural decline in production rates and the obsolescence of some of the group’s assets in the UK.
Jassim Hussain Thabed, Group CEO and Managing Director of Abu Dhabi National Energy Company (TAQA), said: “TAQA Group ended the first quarter of 2023 on a positive note, with a significant increase in our net income as a result of our acquisitions. A Share in ADNOC Case.” Regardless, the company has made significant progress in executing our growth strategy, along with achieving solid financial performance.”
He added: “In terms of growth, we started the year by increasing our stake in the independent Al Taweela B plant for power generation and water desalination, and we also acquired a stake in the company responsible for operations and maintenance at the plant. This has strengthened our capabilities in the field of operation and maintenance, which is one of the areas of growth. We partnered with Engie to build the “Marfa 2” reverse osmosis desalination plant, with a capacity of 120 million gallons of desalinated water per day. This is an important additional step in our efforts to fulfill our commitment to expand our highly efficient reverse osmosis plants.
He continued: “In addition to the above, the company’s shareholders have approved a new policy for distribution of cash dividends for 2023-2025, which includes fixed profits and variable profits. A continuously evolving business model.”
The Board of Directors of “TAQA” has approved the financial results for the first quarter of 2023, and declared the first installment of interim cash dividend in the amount of 0.65 fils per share (a total of 731 million dirhams). Company’s new dividend policy.
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