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Wed 11 May 2011 12:18 PM

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Abu Dhabi's TAQA sees Q1 profit plunge on higher tax

Energy firm posts Q1 net profit at AED152m as tax changes in UK North Sea hit margins

Abu Dhabi's TAQA sees Q1 profit plunge on higher tax
GOVERNMENT OWNED: TAQA is owned 75 percent by the Abu Dhabi government (Bloomberg Images)

Abu Dhabi National Energy Co posted a bigger-than-expected 47 percent drop in first-quarter net profit, hit by increased taxes in the UK, where it drills for heavy crude in the North Sea.

The state-owned utility made a net profit of AED152m ($41.38m) for the quarter, compared with AED287m for the year-ago period, it said in a statement.

Analysts polled by Reuters forecast an average net profit of 313 million dirhams for the quarter.

In mid-March the UK government announced changes to the tax regime for the UK North Sea which was backdated to January 1, 2011, the company said in the statement.

"This contributed to a 53 percent year-on-year increase in tax, negatively impacting net profit," TAQA said.

TAQA's profit rose 11 percent before the tax impact, the statement said.

Quarterly revenues rose 15 percent to AED5.5bn ($1.50bn) compared with AED4.8bn in the same period last year.

The firm sold its stake in its Caribbean power assets in January for $320 million, partly to pay off debt. In December, TAQA secured a $3bn revolving credit facility to be used to refinance an existing $3.15bn facility.

The company was hit by a lawsuit in September, after its former chief executive sued IT in a US court, alleging he was forced out for trying to stop "kickbacks, bribery, accounting fraud and corruption" at the energy firm.

TAQA is owned 75 percent by the Abu Dhabi government.

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