Abu Dhabi National Energy Co's net income advanced to AED218m ($59.4m) from AED90m a year earlier
Abu Dhabi National Energy Co, the state-run utility known as Taqa, said third-quarter profit more than doubled because of higher oil prices and a one-off gain, as the company presses ahead with expansion plans.
Net income advanced to AED218m ($59.4m) from AED90m a year earlier, Taqa said on Wednesday in a statement. Revenue rose to AED5.2bn from AED3.9bn a year earlier.
“The year-on-year increase in net income resulted primarily from increased commodity prices, share of income from the Sohar aluminum plant and liquidated damages received for Fujairah 2, partly offset by increased income tax,” the company said in the statement. “The power business continued to provide stable revenue and net income.”
Profit increased along with oil, which rose to an average $76.21 a barrel in the quarter from $68.24 a year ago. Taqa’s earnings jumped sevenfold in the first three months after crude prices more than doubled. Revenue from oil and gas advanced to AED1.6bn from AED1.4bn a year earlier, while revenue from power and water was stable at AED1.6bn.
Taqa, which is spending $1.4bn this year to develop assets, owns stakes in oil and gas production and power generation assets in the Middle East, North America, India and the North Sea. The company agreed last week to terms on $3bn of credit lines, which it will use to refinance a $3.15bn facility maturing in 2011.
Abu Dhabi Water and Electricity Authority, Taqa’s majority owner, transferred 90 percent of its interest in the Fujairah 2 plant to Taqa in the third quarter, giving the company a 54 percent interest in the power station, according to the statement. The company also received net liquidated damages of AED311m due to a delay in the plant’s completion to the end of 2010.
Last month Taqa hired David Cook, who previously worked for over 20 years with BP and Amoco Corp, as head of upstream.
“The outlook is positive for Taqa as they hired an upstream expert which shows they are keen to expand in that area and will benefit from higher oil prices,” said Vishal Shah, a Kuwait-based analyst for Global Invesment House KSCC. “I don’t foresee many acquisitions this year or the next as they need to capitalize on the many they have already made.”
The company agreed in September to buy Total SA’s 81 percent-equity stake in production licenses for two mature oil blocks in the North Sea. In August Taqa raised its stake in the 1 billion-euro ($1.4bn) Bergermeer gas storage project in the Netherlands to 60 percent. It bought 40 percent of Sohar Aluminium Co. of Oman in June.
Taqa is meeting its 2010 production target of 126,000 barrels of oil equivalent a day to 138,000 barrels a day, Chief Financial Officer Doug Fraser said on a conference call on Wednesday.
It completed a quarter of the divestment program at its Canadian unit Taqa North, selling assets that produce 2,000 barrels a day of oil equivalent out of an initial 8,100 barrels a day, and will complete another sale during the fourth quarter, General Manager Carl Sheldon said on the call.
Taqa filed motions on Nov. 5 to dismiss claims against it by the company’s former chief Chief Executive Officer Peter Barker-Homek, who left last year after making almost a dozen acquisitions in three years. Barker-Homek claimed he was forced out after trying “to put a stop to the kickbacks, bribery, accounting fraud and corruption,” according to his breach-of- contract lawsuit filed Aug. 27 in a federal court in Detroit in the U.S. state of Michigan.