TAQA reports full year net profit of AED 160 million for 2017
22 March 2018
ABU DHABI, United Arab Emirates - Abu Dhabi National Energy Company PJSC (TAQA), a leading global energy company headquartered in Abu Dhabi with operations in 11 countries, today reported its fully audited financial results and operational highlights for the financial year, ending 31st of December 2017.
TAQA reported a net profit attributable to shareholders of AED 160 million for the 2017 financial year, as the oil and gas business benefitted from higher hydrocarbon prices and sustained cost efficiencies, and the power and water business continued to deliver strong income.
TAQA's total revenues stood at AED 16.7 billion in 2017, an increase of 4% on 2016. Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 7% to AED 9.1 billion, with sustained cash cost savings contributing to the improved EBITDA margin.
The company continues to benefit from the two-year transformation programme, which finished in 2016, having delivered an AED 13.2 billion reduction in costs, including capital and operating expenditure. In 2017, operating expenditure in the oil and gas business was approximately 40% lower than 2014 levels.
In 2017, TAQA generated free cash flow of AED 7.4 billion, which was 1% higher than in 2016. This increase was primarily a result of the aforementioned higher EBITDA which was utilized to support increased levels of investment.
H.E. Saeed Mubarak Al-Hajeri, Chairman of the Board of Directors, said:
"Having completed a two-year transformation programme in 2016, TAQA is now well positioned to contribute further to the economic diversification strategy being pursued by the Abu Dhabi government - our main shareholder. Our base in the UAE's capital has given us a stable economic and financial environment, where we benefit from our long experience and robust capabilities in the power and water sector as we supply the majority of Abu Dhabi's power and water needs, while our regional business networks are critical to sourcing attractive opportunities in the future.
Across the region, policymakers are encouraging greater investment in vital infrastructure. As TAQA charts a new strategic path in the coming years, it will be able to draw experience in building a global business, and the technical expertise that runs through all our operations."
Full year 2017 financial highlights:
· 2017 total revenues of AED 16.7 billion, an increase of 4% on 2016 (2016: AED 16.1 billion) primarily driven by higher commodity prices that benefitted the oil and gas business, while the power and water business remained steady.
· 2017 EBITDA of AED 9.1 billion, up 7% on 2016 (2016: AED 8.5 billion) supported by higher revenues and sustained cash cost savings.
· TAQA turned to net profit in 2017. Profit attributable to equity holders of AED 160 million.
· 2017 free cash flow of AED 7.4 billion, which was 1% higher than in 2016 (2016: AED 7.3 billion) . This increase was primarily a result of the aforementioned higher EBITDA which was utilized to support increased levels of investment.
· Total liquidity remains strong at AED 15.4 billion, including AED 4.2 billion in cash and cash equivalents and AED 11.2 billion of undrawn credit facilities.
Operational Highlights: Power & Water
· Global power and water business delivered a robust operating performance, with 89,846 GWh of gross power generation and 249,469 MIG of gross water desalination. This places TAQA in the global industry's top quartile producers. Global power technical availability decreased slightly to 92.1% in 2017, from 93.6% in 2016, due partly to unplanned outages at a power plant in Ghana.
· UAE operations produced 64,064 GWh of electricity and 249,469 MIG of desalinated water, meeting the majority of Abu Dhabi's water and electricity requirements.
Operational Highlights: Oil & Gas
· Production volumes of 126,200 barrels of oil equivalent per day (boe/d) in 2017, down by 8% from 2016 (137,300 boe/d), impacted by natural decline, prior capital expenditure reductions and planned North Sea platform maintenance.
· Operating margins per barrel increased, driven by higher realised prices and sustained cost efficiencies.
· Production at the Atrush Block in the Kurdistan Region of Iraq began in July 2017 and TAQA received its first payments from the Kurdistan Regional Government.
Saeed Hamad Al Dhaheri, acting Chief Operating Officer, said:
"TAQA has come through an extremely tough market environment, with the company's financial results reflecting the company's resilience. Turning to a net profit in 2017 is therefore an impressive and notable achievement. Higher hydrocarbon prices, together with sustained cost efficiencies, benefited our oil and gas business, while the power and water business continued to deliver a robust operational and financial performance. The company is focused on optimizing returns from all of its global assets, while playing a key role in Abu Dhabi's economic development by being a major player in the regional power and water sector."
Mohammed Al Ahbabi, acting Chief Financial Officer, said:
"Since oil prices fell sharply in 2014, TAQA has worked hard to transform the company. We have already seen positive operational and financial results of our work, with the transformation programme resulting in the reduction of costs by AED 13.2 billion. TAQA has been able to continue to record strong cash flow generation, and improved profitability, with total revenues increasing 4 percent in 2017 to AED 16.7 billion, and the company turning to a net profit. We have been working hard to lower TAQA's finance costs, and we are gradually reducing its debt levels, which will have a positive impact on our financial performance in the coming years."
- ENDS -
TAQA media relations:
Sara Al Blooshi
Tel: +971 2 691 4940
This information is provided by RNS