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Thu 7 Aug 2008 03:11 PM

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TAQA predicts bumper H2 earnings

INTERVIEW: Profit to exceed H1 as revenues from recent acquisitions come online, chief executive says.

Abu Dhabi National Energy Co (TAQA) expects earnings in the second half of the year to exceed H1 as revenues from its recent acquisitions begin to feed through to its bottom line, the company's CEO has told Arabian Business.

Peter Barker-Homek said on Thursday profit growth experienced during H1 would be "indicative of the type of growth we will experience in Q3 and Q4".

"We are expecting profits better than the first half of the year," Barker-Homek said in an interview, without being more specific.

"We would expect shareholders to be happy and that [earnings] should be very solid," he added.

TAQA saw profit jump 154 percent in the second quarter, boosted by its newly-acquired overseas operations and record oil prices.

Q2 net income increased to 471 million dirhams ($128.2 million), or 11 fils-per-share, compared to 186 million dirhams during the same period last year.

Barker-Homek said profit in H2 would be driven by the Shell-Exxon deal and a couple of other deals that could be completed in the fourth quarter, as well as by organic growth.

TAQA in July bought northern North Sea equity interests from Shell and ExxonMobil as part of efforts to consolidate its presence in Europe.

Barker-Homek said over the 12 months TAQA expected to grow its balance sheet by at least 25 percent.

"We want to grow the balance sheet by 25 percent year-on-year... I would expect our earnings and revenue, our top line numbers, to grow at that pace or higher," he said.

Barker-Homek said TAQA planned to spend around $5 billion in the second half of the year, a good portion of which will be consumed in the Shell-Exon deal.

However, he said the company was also working on a couple of power deals in North America, one in Canada and one in the United States. He said one was with a "major US utility", without giving further details.

"It would be a very nice portfolio to have in North America if we get both," he said.

Barker-Homek said TAQA was on course to hit its target of $60 billion in assets by 2012.

"I think we are on target to achieve [$60 billion in assets by 2012]. Do I think we’ll achieve it? I guess it depends a lot on the depth of the financial crisis, which would make capital more or less available," he said.

"I think the opportunities will clearly be there, and certainly more opportunities if we have a deeper recession."