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Mon 15 Feb 2010 07:05 PM

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Abu Dhabi's Taqa shares slip after Q4 earnings

Abu Dhabi government owned utility made a net loss of $22.5m in 2009's Q4.

Abu Dhabi's Taqa shares slip after Q4 earnings
LOW RESULTS: Abu Dhabi owned Taqa saw its shares fall by as much as 4% after the company posted lower than expected results in 2009. (Getty Images)

Abu Dhabi National Energy Company's (Taqa) shares fell as much as 4 percent on Monday after the company posted lower than expected results due to low commodity prices and missing analysts' forecasts.

The majority Abu Dhabi government owned utility made a net loss of $22.59 million in the fourth quarter versus a $63.43 million profit in the same period in 2008, according to Reuters calculations.

Taqa's full year profit 2009 dived 90 percent to $49.8 million against $498.2 million the previous year, according to a statement.

Taqa's shares closed at $0.33 on Monday.The firm made a net profit of $72.4 million in the nine months to Sept 30 after minority interests.

Two analysts polled by Reuters said Taqa would make a profit of $94.66 million and $28.8 million respectively.

Angad Rajpal, research head, Prime Emirates, said: "Although the results were lower than consensus, we recommend that investors focus on the positive shift in the company's strategy that is increasingly inclined towards further optimising/expanding Taqa's downstream portfolio."

Taqa's shares slipped as much as 4 percent during the session, before closing 2.4 percent lower.

Revenues of Taqa increased marginally by 0.8 percent to $4.61 billion in 2009 versus $4.57 billion in 2008, according to preliminary results of the company.

In a statement, Carl Sheldon, general manager, said: "The diversification of our portfolio demonstrated its value as the solid revenues from our downstream portfolio offset lower commodity prices in our upstream business."

Taqa shifted into a new phase of its growth strategy, evolving from an acquisitive company into one focussed on organic growth and asset optimisation.

He said: "We are committed to integrating our assets to realise their full potential."

The firm has substantial opportunity to drive organic growth within its business with the Jorf Lasfar expansion, Fujairah 2 transfer and Bergermeer Gas Storage as well as new drilling programmes in the northern North Sea and the Horn River Basin, he said.

Taqa is also aiming to reduce its debt to capital to 70 percent in the long term. In 2009, the ratio was reduced to 82 percent from a high of 88 percent in the previous year, the statement said.

Taqa made a gain of $70.7 million last year from buyback of its 2036 bonds of a nominal value of $323 million.

It continues to evaluate the potential for further bond buybacks.

It also repurchased 158.7 million shares last year as part of its share buyback programme of up to 10 percent of its share capital.

The final results of the company will be announced in mid March, Sheldon said. (Reuters)

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