UAE's Taqa sees new projects aiding revenues, cutting capex

Abu Dhabi National Energy Co has already commissioned three new projects in the Netherlands, Ghana and India
UAE's Taqa sees new projects aiding revenues, cutting capex
(Photo for illustrative purposes only)
By Reuters
Thu 12 Nov 2015 01:44 PM

Abu Dhabi National Energy Company (Taqa) expects its new projects coming on stream this year and next will lift revenues while capital expenditure reduces to offset the impact of low oil prices, its chief financial officer said on Thursday.

A desalination plant in the United Arab Emirates and an oil field in the UK North Sea, Cladhan, will be commissioned before the year-end, while the Atrush field in the Kurdistan region of Iraq is due to come on stream in mid-2016.

This year Taqa has already commissioned three new projects, in the Netherlands, Ghana and India.

"These projects add new streams of revenues and reduce capex levels thus enhancing cash flows," Grant Gillon told Reuters.

"We are resetting the business to better cope with the low commodity price environment by reducing costs and improving the efficiencies of our operations," he said, adding it would help Taqa to improve profitability as prices recover.

On Wednesday, Taqa posted a third-quarter net loss of 416 million dirhams ($113 million) - its second consecutive loss this year due to weak oil prices, with oil and gas revenues more than halving.

However, capital spending in the first nine months of the year is down by 43 percent at 1.9 billion dirhams, ahead of its annual target of a 40 percent reduction. The company is aiming to reduce capex by 1.5 billion dirhams in 2016.

Taqa has brought down its debt level to 75.2 billion dirhams ending September 2015 from 76.5 billion dirhams at the start of the year, Gillon said, adding they have no requirement for additional funding in the short term.

Earlier this year Taqa refinanced $3.1 billion of existing revolving credit facilities maturing in December 2015 and December 2017 on favourable terms. Taqa also has 12.2 billion dirhams of available liquidity, he said.

Buoyed by stable revenues from its water and power business, Taqa is eyeing more opportunities in this area, particularly in the UAE, he said, without being more specific.

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