Significant increase in oil & gas production and net power generation capacity AED 4.2 billion revenues and AED 40 million net profit
Abu Dhabi National Energy Company PJSC, a publicly listed company on the Abu Dhabi Securities Exchange (ADX: TAQA), today reported financial results for the first quarter of 2009.
Key highlights:
• Total revenue reached AED 4.2 billion compared with AED 4.0 billion for the same period in 2008, an increase of 5%.
• Revenue from the electricity and water business, excluding supplemental fuel, increased by 14% to AED 1.4 billion, from AED 1.2 billion for the same period in 2008. This was primarily due to the expansion of Taweelah B and revenue from the Red Oak toll acquired in December 2008.
• Revenue from oil and gas activities (including gas storage) reached AED 1.8 billion, compared with AED 2.1 billion for the same period in 2008 as a result of lower net realized oil and gas prices.
• Net profit, after minority interests, for the quarter was AED 40 million compared with AED 398 million in the same quarter in 2008. The decrease in net profit for the quarter is mainly attributable to the decrease in realized oil and gas prices during the period and lower foreign exchange rates.
• EBITDA was AED 1.9 billion for the first quarter of 2009, versus EBITDA of AED 2.3 billion in the same period in 2008. This translates to an EBITDA margin of 45%.
• Basic earnings per share were 0.6 fils for the quarter, compared to 9.6 fils for the same period in 2008.
• Total assets as at 31 March 2009 were AED 87.0 billion.
Comment
Peter Barker-Homek, Chief Executive Officer of TAQA, said:
“There is little doubt that the first quarter of 2009 has been a one of the most challenging to-date, for both TAQA and the global economy. However, despite difficult conditions in global energy markets, which have seen the price of oil hit lows of $41.15 per barrel in February 2009, the results I present today are once again a clear endorsement of TAQA’s diversification strategy and proven management team. They also support our long-term objective of building a distributed asset base in North America, Europe and the Middle East.
We remain committed to rigorous and disciplined cost control and to ensure that as production and net capacity increases, so too do efficiencies across the group.
As I look out into 2009, I take pride in the strength of our position and quality of the team we have built. TAQA remains well funded with no short-term refinancing needs and significant free cash flow to cover existing obligations and fund opportunities for future growth.”
Market overview
During the first quarter of 2009, global energy markets continued to decline sharply, particularly when compared with the first quarter of 2008. This saw the Brent oil price fall from US$96.97 at the end of March 2008 to US$50.56 at the end of the same quarter of 2009.
This position was also reflected in North America, with the WTI crude price falling from US$96.25 to US$51.37. Throughout the quarter, US crude oil inventories continued to rise, which put pressure on prices. The lowest point was reached in February 2009, but there has been a steady recovery in recent weeks.
The US dollar also strengthened against the Canadian dollar from CDN$1.02 / US$1 on 31 March 2008 to CDN$1.26 / US$1 on 31 March 2009, reaching a high of CDN$1.29/US$1 on 9 March 2009.
Downstream
• TAQA’s international and domestic downstream activities are a critical component of its diversified portfolio and now comprise 56% of total revenues and 55% of EBITDA. During the first quarter of 2009, TAQA’s downstream activities generated revenues of AED 1.4 billion, excluding supplemental fuel.
• Subsequent to the recent acquisition of power generation facilities in the Caribbean, as at 31 March 2009, TAQA’s downstream operations represents total global generation capacity (gross) of 12,909 MW, During the first quarter of 2009, total power production was 9,450 Gwh, made up of 6,071 Gwh in the domestic market and 3,379 Gwh internationally.
• TAQA’s total water desalination for the period was 46,211 MIG, with an installed capacity of 654 MIGD.
• TAQA’s domestic portfolio accounts for 79% of the total power and water revenue, with its international portfolio of assets accounting for a further 21% of the total power and water revenue (excluding supplemental fuel).
• Technical availability of the power generation businesses averaged 89.2% with an average domestic availability of 89.2% and an international average availability of 89.3%.
Upstream and midstream
• Upstream activity generated revenues of AED 1.8 billion (including gas storage and other revenue), 44% of total revenues and 43% of the total segmental profit.
• Total production was 139.3 thousand barrels of oil equivalent per day (mboe/day) in the first quarter of 2009, split between TAQA North (92.0 mboe/day), TAQA Bratani (40.9 mboe/day) and TAQA Energy (6.4 mboe/day), up from 112.3 mboe/day in the first quarter of 2008.
• Average net realized price of crude oil sold was US$35.78 per barrel for TAQA North, US$57.42 per barrel for TAQA Bratani and US$58.64 per barrel for TAQA Energy.
• Average net realized price for natural gas sold was US$4.53 per thousand cubic feet (mcf) for TAQA North, US$6.32 per mcf for TAQA Bratani and US$10.06 per mcf for TAQA Energy.
Finance
• In February 2009, TAQA announced a share buyback programme of up to 10% (622.5 million shares) of the share capital of the firm. At the end of April 2009, TAQA had repurchased 116.7 million shares.
• During the period under review, TAQA repurchased bonds with a nominal value of US $201 million (AED 738 million). This has resulted in a gain of AED 174 million for the period.
Corporate activity during the period
• In March 2009, TAQA completed the US$320m acquisition of a 50% equity stake in Marubeni’s Caribbean energy power portfolio. The deal increases TAQA’s power generation capacity to 12,909 MW (gross) from 10,609 MW; and extends TAQA’s energy value chain to power transmission and distribution.
Post period developments
• At the Annual General Meeting held on 21 April 2009 the shareholders of the Company approved the payment of a dividend of 15 fils per share totaling AED 933 million payable on 21 May 2009.
• On 23 April 2009, ADWEA announced its intention to transfer 90% of its holding in Fujairah Water and Electricity Company to TAQA. Fujairah Water and Electricity Company holds a 60% interest in the Fujairah Asia Power Company which owns the Fujairah 2 power and water plant, currently under construction.
• On 7 May 2009, positive advice was received from the Environmental Impact Assessment (EIA) Commission regarding the Bergermeer Gas Storage project in the Netherlands. This marks an important milestone. Following the Commission’s advice, the EIA and the related consultations have been completed allowing the project to move into the permitting phase.
• On 12 May 2009, TAQA signed a strategic partnership agreement with the Office National de L’Electricite in Morocco to expand the size of the Jorf Lasfar plant by two new units with at least 350 MW of capacity each.
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