TAQA announces 89% fall in Q1 profit

ENERGY PROFITS: The Abu Dhabi National Energy Company has posted a big drop in first quarter profit. (Getty Images)

Abu Dhabi National Energy Company (TAQA) on Thursday announced first quarter profits of AED40m ($10.8mn), an 89 percent fall from AED398m in the same period last year.

TAQA attributed the profits slide to the decline in oil and gas prices and lower foreign exchange rates during the period.

The government-run company’s total revenue rose by five percent to AED4.2bn from AED4bn during the first quarter of 2008, it said in a statement.

Revenue from TAQA’s electricity and water business, excluding supplemental fuel, increased by 14 percent to AED1.4bn from AED1.2bn for the same period in 2008.

It said the rise was primarily due to the expansion of Abu Dhabi power project Taweelah B, and revenue from acquiring in December 2008 the Red Oak toll, a combined cycle gas turbine power plant in New Jersey in the US.

However, its revenue from oil and gas activities slid by 14 percent to AED1.8bn, compared with AED2.1bn in the first quarter of 2008.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) were AED1.9bn for the first quarter, compared to AED2.3bn in the same period in 2008. This translated to an EBITDA margin of 45 percent, it said.

Basic earnings per share were 0.6 fils in the first quarter, compared to 9.6 fils for the same period in 2008.

The company’s total assets as at March 31 were AED 87bn.

“There is little doubt that the first quarter of 2009 has been a one of the most challenging to-date, for both TAQA and the global economy,” said Peter Barker-Homek, chief executive officer of TAQA, which is 75 percent owned by the Abu Dhabi government.

But he said the results were an endorsement of TAQA’s diversification strategy and proven management team, despite difficult conditions in global energy markets, which had seen the price of oil hit lows of $41.15 per barrel in February.

He said the results supported TAQA’s long-term objective of building a distributed asset base in North America, Europe and the Middle East.

“TAQA remains well funded with no short-term refinancing needs and significant free cash flow to cover existing obligations and fund opportunities for future growth,” he said.

The company remained committed to rigorous and disciplined cost control and to ensure that as production and net capacity increases, so too did efficiencies across the group.

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