Abu Dhabi National Energy Company PJSC (“TAQA”), a publicly listed company on the Abu Dhabi Securities Exchange (ADX: TAQA), today reported its Second Quarter 2011 operational and financial results.

Summary of results
TAQA posted a strong operational and financial performance for Q2 2011, benefitting from higher oil prices and a quarterly increase in UK production, along with higher Power & Water revenue from the Fujairah 2 plant. Combined with a steady cost control, this resulted in a Net Profit After Minority Interests of AED 435 million.
In addition to a positive quarterly performance, TAQA has made progress on its key growth projects in Morocco, the Netherlands, Ghana and India. TAQA’s cash position and liquidity remains strong with over AED 4.0 billion in cash and cash equivalents, plus AED 11.7 billion in undrawn facilities, as of 30 June 2011.

Comment
Carl Sheldon, General Manager of TAQA, said:
“TAQA’s performance during the second quarter of this year has been strong – both operationally and financially. A consistent and solid operational performance combined with a more favourable commodity pricing has delivered a net result for the first six months of 2011 of which we can be proud.

“Quarterly performance aside, we remain firmly committed to our longer term vision for growth across our key markets. We have made clear that our future will be largely driven by the organic growth opportunities we identify and harness in our existing footprint. Our asset base is already growing as a result of the success in our North American and UK North Sea drilling programmes and all other growth projects have made pleasing progress this quarter. In particular, construction started this year at Jorf Lasfar plant in Morocco for the 700 MW expansion.
“This combination of a positive quarterly performance, and continued investment in TAQA’s future, gives me confidence as we move through an exciting period in the company’s development.”

Stephen Kersley, Chief Financial Officer of TAQA, said:
“During the quarter, steady production in our Oil & Gas business has enabled TAQA to capture the benefits of a higher commodity price environment, while carefully controlling operational expenditure. This was supported by higher contributions from the Power & Water business due to contributions from Fujairah 2. The result was an increase in gross profit which, in turn, had a direct and positive impact on our bottom line. “Consistent delivery against our internal targets continues to enhance our overall financial position. TAQA has good available liquidity and a strong cash position, leaving us with ample headroom to continue investing in our organic growth projects and the future of the company.”

Financial Summary: Q2 2011 versus Q2 2010
Total revenues for Q2 2011 were AED 7.1 billion, 38% higher year-on-year, compared with total revenues of AED 5.1 billion in Q2 2010. Total Oil & Gas revenues (including gas storage and other income) increased from AED 2.0 billion to AED 3.1 billion for Q2 2011. This 54% increase versus the same period last year was primarily driven by the increase in crude oil prices, plus higher production in the UK North Sea. Total Power & Water revenues, excluding supplemental fuel income, increased from AED 1.6 billion in Q2 2010 to AED 1.9 billion in Q2 2011. This 17% year-on-year increase was primarily due to the contribution from Fujairah 2, which was transferred to TAQA in the third quarter of 2010 and fully commissioned in January 2011. Supplemental fuel income increased 38% year-on-year due to higher use of alternative fuel supplies at TAQA’s domestic power plants.

Other operating revenue increased due to higher transportation revenues in Canada and the Netherlands.
Cost of sales increased 25% from AED 3.7 billion to AED 4.6 billion. Within this, fuel expenses increased in line with supplemental fuel revenues. Operating expenses increased by 27%, while depreciation, depletion and amortisation increased 21% reflecting TAQA’s increased asset base. Profit before Tax was AED 1.4 billion, 151% higher year-on-year, due to higher revenues as a result of the oil price, plus tight control over operating expenses. Net Profit After Minority Interests increased 154% year-on-year, totalling AED 435 million for Q2 2011, versus AED 171 million for Q2 2010. Total debt and net debt increased year-on-year due to the transfer of interests at Fujairah 2 and Shuweihat 2. However, TAQA’s Net Debt/Capital ratio decreased to 79%. Net Debt/EBITDA reduced to 4.9 times for Q2 2011, versus 5.7 times at the end of Q2 2010.

Operational Highlights

Power & Water
TAQA has grown to become the sixth-largest global Independent Power Producer (IPP). Its Power & Water business performance continues to generate steady, stable cash flows, with a top-quartile performance for technical availability.

TAQA produced 16,215 GWh of electricity and 53,280 MIG of water during Q2 2011, generating total revenues of AED 1.9 billion for the second quarter. The 17% increase in revenues compared to the same quarter last year reflects the contribution from Fujairah 2, operational from January 2011. Global technical availability was 96% for the second quarter of 2011, in line with the excellent performance of TAQA’s power assets in previous quarters.

Domestic
During the summer months, TAQA’s domestic Power & Water assets experienced an increase in demand for their services due to the seasonal effects of higher temperatures in the region. Throughout this period of high demand, TAQA’s domestic power plants generated 12,576 GWh of power and desalinated 53,280 MIG of water. Technical availability was high at 97%, reflecting the quality of TAQA’s domestic power plants.

Fujairah 2, TAQA’s newest plant, ran at 98% technical availability, generated 2,046 GWh of electricity and produced 5,143 MIG of desalinated water during the second quarter.

Completion of the first of two phases at Shuweihat 2, a 1,500 MW and 100 MIGD plant, was originally scheduled for June but was delayed to mid-July. The first unit (750 MW, 50 MIGD) is now operational and the second unit (750 MW, 50 MIGD) is expected to be completed in October 2011. TAQA received liquidated damages of AED 60 million during Q2 2011 in relation to the slight delay to completion of the first unit.

International
TAQA’s international power portfolio, which comprises of assets in Morocco, Ghana, India, Saudi Arabia and the USA, generated 3,639 GwH of power during the second quarter. International technical availability was 91%, a slight increase compared to the same period last year.

In Morocco, the Jorf Lasfar plant has continued to perform at a high level of technical availability during the quarter, generating 2,633 GWh of electricity. The Jorf Lasfar 700 MW expansion project continued to progress to schedule with construction commencing on the major civil works for the project earlier this year. Commissioning and takeover of units 5 & 6 is planned for the end of 2013 and early 2014, respectively.

In Ghana, TAQA’s rolling maintenance programme continued with two planned inspections during the quarter, plus three unplanned outages. Two of these were resolved, with one ongoing, for which the fault has been identified and the replacement machinery ordered. The outage has had some impact on technical availability for the plant and is expected to be fully resolved by October.

 

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