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Abu Dhabi National Energy Company PJSC (،°TAQA،±), a publicly listed company on the Abu Dhabi Securities Exchange (ADX: TAQA), today reported its operational and financial results for the second quarter and first half of 2012.
Summary of results
The first half of 2012 saw a strong performance by TAQA’s Power & Water business, which grew revenues by 14% during the period, largely due to new production coming online at the Shuweihat 2 Independent Water and Power Project (IWPP) in Abu Dhabi. Operations in the UK North Sea have also performed strongly, both operationally and financially, benefitting from higher production and oil prices. However, the continued weakness of North American gas prices have impacted the overall performance of the Oil & Gas business. TAQA benefitted from its disposal of non-core assets, such as its holding in Tesla Motors and non-core acreage in North America, which has boosted profitability. At the end of the first half, TAQA had strong liquidity with cash and cash equivalents of AED 5.1 billion.
Carl Sheldon, Chief Executive Officer of TAQA, said:
“We have seen a strong performance by our Power & Water business in the first half, with new capacity at Shuweihat 2 coming online and high availability across our portfolio supporting this. We have also seen our UK Oil & Gas operations boost production and continue to benefit from higher pricing in comparison with last year. Particularly, pleasing is that we have passed our 1,000th day as duty holder of our North Sea assets and more than 100 million barrels of oil have now safely passed through the Brent Pipeline System under our operatorship.
“However, it is clear that the first half of 2012 has been a challenging period for the global economy, a fact that can be clearly seen in falling global commodity prices. North American gas prices have continued to weaken with Henry Hub prices reaching a 10-year low in February 2012. Prices have since recovered somewhat, but overall gas price weakness has had a significant impact on our North American performance.
More positively, we have seen our expansion plans at the Jorf Lasfar power plant in Morocco continuing on time and on budget, and that combined with the start of construction of Bergermeer Gas Storage, the acquisition of power assets in Iraq and additional acreage in the UK North Sea, we are positioned well for future growth.”
Stephen Kersley, Chief Financial Officer of TAQA, said:
“We continued our programme of non-core asset disposals, with the sale of our holdings in Tesla Motors for an attractive profit. We have maintained strong liquidity, with cash and undrawn committed credit facilities of nearly AED 20 billion at the end of the period. We also successfully closed a US$ 1.4 billion equivalent, 16-year, multi-currency non-recourse project financing for the expansion of Jorf Lasfar, which further increases our financial flexibility on a group level.
Financial Summary: H1 2012 versus H1 2011
Total revenues for H1 2012 were AED 11.8 billion, 6.3% lower year-on-year, compared with total revenues of AED 12.6 billion in H1 2011, largely due to lower supplemental fuel usage during the period.
Total Oil & Gas revenues (including gas storage and other income) decreased from AED 6.0 billion to AED 5.9 billion for H1 2012. This was primarily due to the significant fall in natural gas prices in North America and lower production in North America following non-core asset disposals, offset by higher production and realized prices in the UK North Sea.
Total Power & Water revenues, excluding supplemental fuel income, increased from AED 3.5 billion in H1 2011 to AED 4.0 billion in H1 2012. This 14.1% year-on-year increase was primarily due to the contribution from Shuweihat 2, which became fully operational in Q3 2011.
Supplemental fuel income decreased 35.4% year-on-year, due to the availability of natural gas and consequent lower use of alternative fuel supplies at TAQA’s domestic power plants.
Cost of sales decreased 3.7% from AED 8.0 billion to AED 7.7 billion primarily due to lower supplemental fuel expenses. Operating expenses decreased by 9.0%, while depreciation, depletion and amortisation increased 6.1%, reflecting TAQA’s increased asset base.
A positive foreign exchange effect of AED 105 million in H1 2012, compares with a negative impact of AED 70 million in H1 2011 and was principally due to the weakening Moroccan Dirham versus the US Dollar and exchange rate fluctuations between the US Dollar and British Pound relating to revaluation of net monetary liabilities in the UK..
Profit before Tax was AED 2.5 billion, 7.0% higher year-on-year, due to a strong performance from the Power & Water business and the disposal of non-core assets for a total consideration of AED 956 million (US$ 260 million), realizing a gain of AED 415 million.
Net Profit After Minority Interests increased 67.1% year-on-year to AED 981 million for H1 2012, versus AED 587 million for H1 2011.
TAQA has strong liquidity with cash and cash equivalents of AED 5.1 billion.
Total debt of AED 73.2 billion in H1 2012 decreased by 2% from AED 75.0 billion in the same period last year, and net debt of AED 68.0 billion decreased 4% year-on-year from AED 71.1 billion in H1 2011. TAQA’s Net Debt/Capital ratio was flat at 77% while Net Debt/EBITDA increased from 4.86 to 5.58.
Operational Highlights
Power & Water
TAQA’s Power & Water business performance continues to generate steady, stable cash flows, with a top-quartile performance for technical availability.
TAQA produced 34,322 GWh of electricity and 114,984 MIG of water during H1 2012, generating total revenues of AED 4.0 billion for the first half. The 14.1% increase in revenues compared to the same period last year, reflects the contribution from Shuweihat 2 which came into full production in October 2011. Global technical availability was 94.0% for the first half of 2012, in line with the excellent performance of TAQA’s power assets in previous periods.
Domestic
During this period of high demand, TAQA’s domestic power plants generated 23,994 GWh of power and produced 114,984 MIG of desalinated water. Technical availability was high at 94.2%, with a particularly strong performance in the second quarter, reflecting the quality of TAQA’s domestic power plants.
On 20 June 2012, TAQA signed a Memorandum of Understanding for the joint development of a 100 MW Waste to Energy facility in Abu Dhabi with the Centre of Waste Management Abu Dhabi. The finished plant will be one of the largest Waste to Energy plants in the world, and the first of its kind in The United Arab Emirates. The facility will be capable of processing up to a million tonnes of municipal solid waste per annum and is expected to be operational by 2015/16.
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