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Abu Dhabi National Energy Company PJSC (“TAQA”or “the Group”),one of the largest listed integrated utilities companies in Europe, the Middle East and Africa, reported its earnings for the period ending 30 June 2024. TAQA delivered solid financial results, supported by stable returns from its Transmission & Distribution business and further strengthened by the contribution from Sustainable Water Solutions Holding Company PJSC (SWS Holding).
Financial highlights
- Group revenues were AED 27.2 billion, 2.0% higher than the prior-year period, due to the contribution from SWS Holding, which also increased adjusted EBITDA and net income.
- Adjusted EBITDA was AED 10.9 billion, 4.0% higher than the first half of 2023.
- Net income was AED 4.4 billion, up AED 0.5 billion (12.3%) compared to the prior year, excluding one off items, but a decrease of AED 9.2 billion when these one-off items are included.
- Capital expenditure was AED 3.8 billion, 91% higher than prior year driven mainly by construction progress in the Mirfa 2 Reverse Osmosis (M2 RO) and Shuweihat 4 Reverse Osmosis (S4 RO) desalination projects as well as timing and phasing of project execution within the T&D business.
- Free cash flow generation was AED 4.3 billion, AED 2.1 billion lower than the previous year, primarily reflecting capital expenditure on the development of M2 RO and S4 RO desalination projects and working capital movements.
- Gross debt was AED 58.6 billion, down from AED 61.7 billion at the end of 2023, primarily due to the repayment of AED 3.5 billion of matured corporate bonds and scheduled loan repayments of AED 1.5 billion. This decrease was partially offset by an additional AED 1.5 billion in project debt from the acquisition of SWS Holding and AED 0.6 billion from new project debt to fund the development of the M2 RO and S4 RO projects.
Strategic highlights
- In our Transmission and Distribution business:
- TAQA, Vision Invest and GIC Consortium announced the financial closing for Juranah Independent Strategic Water Reservoir Project in Makkah, Saudi Arabia. This is a significant milestone for TAQA as it underscores TAQA’s commitment to supporting sustainable development in the region and aligns with its strategy to expand its Transmission and Distribution business internationally.
- In our Generation business:
- TAQA’s Generation business announced the signing of a Power and Steam Purchase Agreement with SATORP, a joint venture company owned by Saudi Aramco and TotalEnergies, to develop a cogeneration plant for the strategic expansion of a Petrochemical complex in Saudi Arabia. TAQA will own 51% of the plant, with Jera owning the remaining 49%. TAQA and Jera will also handle the operation and maintenance of the plant. The plant will supply up to 475 MW of power and approximately 452 tons per hour of steam using advanced combined cycle gas-fired technology.
- Taweelah Reverse Osmosis Independent Water Plant commenced full commercial operations during Q2 2024. One of the world’s largest and most efficient operational desalination plants of its kind with a capacity of around 200 million imperial gallons per day.
- Masdar's Strategic Acquisitions in Europe and North America:
- Masdar signed a definitive agreement with GEK TERNA to acquire 67% of Terna Energy enhancing its renewable energy portfolio in Greece and the EU. Terna Energy aims for 6 GW operational capacity by 2030.
- Additionally, Masdar announced plans to acquire a 50% stake in Terra-Gen, a North American renewable energy company, from Energy Capital Partners, which operates 2.4 GW of wind and solar and 5.1 GWh of energy storage across the US.
- These acquisitions, expected to close by the end of 2024 pending regulatory approvals, will significantly contribute to Masdar’s goal of reaching 100 GW of global capacity by 2030.
Operational highlights
- Transmission network availability for power and water of 98.5% in H1 2024 (H1 2023: 98.2%), marginally higher versus the comparative period last year.
- Generation global commercial availability of 98.1% in H1 2024, compared to 98.7% in the same period last year, marginally lower due to both planned and unplanned outages across the UAE and international fleet.
- SWS asset availability of 96.4%, underscoring the robust performance of the assets accounted for by TAQA since the beginning of 2024.
- Oil & Gas average production volumes decreased to 104.9 thousand barrels of oil equivalent per day (boepd), a decrease of 7.6% compared to the first half of 2023. This decrease is mainly due to the natural decline in production and decommissioning activity associated with the Group’s late-life UK assets.
His Excellency Mohamed Hassan Alsuwaidi, Chairman of TAQA, commented: “TAQA's continued growth during the first half of 2024 is a result of its unwavering commitment to unlocking long-term value for stakeholders. The Group has consistently achieved strong financial results, underpinned by an improved credit rating of AA by Fitch, demonstrating the resilience of its balance sheet.
TAQA’s focus on executing projects that will further cement its leading market position remains steadfast. A notable milestone is the upcoming integration of SWS Holding, which will contribute to TAQA’s transformation into a vertically integrated utility leader with expanded expertise in water treatment.
Looking ahead, TAQA remains dedicated to sustainable growth and progress that balances shareholder benefits with our stewardship of the environment and communities.”
Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director, commented: “TAQA's robust financial and operational performance in the first six months of 2024 was driven by the sustained growth across the Transmission & Distribution business, and bolstered by the welcome addition of SWS Holding. These reliable sources of income align with TAQA’s ambition to be an integrated utility champion, providing low-carbon power and water to the communities it serves and creating value for stakeholders. During this period, TAQA also remained focused on delivering on key strategic projects.
On the generation side, TAQA in partnership with JERA, signed a Power and Steam Purchase Agreement with SATORP, a joint venture company owned by Saudi Aramco and TotalEnergies, to develop an industrial steam and electricity cogeneration plant in Saudi Arabia. Additionally, TAQA along with its partners achieved financial closing of the Juranah Independent Strategic Water Reservoir Project in Saudi Arabia, aligning with its strategy to expand the transmission and distribution business beyond the UAE.”
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