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Abu Dhabi National Energy Company (TAQA) reported net revenue of AED 11.6 billion (US$ 3.15 billion) in the first quarter (Q1) of the year, an increase of AED 9.6 billion mainly due to the one-off Gain 5% stake in Adnoc Gas.
TAQA Group’s revenue reached AED 13.1 billion, an increase of 6% compared to the same period last year, mainly due to higher tariffs on direct bulk supplies and transmission usage of systems within the transmission and distribution sector.
Additional financial highlights for the first quarter of 2023:
• Adjusted EBITDA was AED 5.3 billion, down 5%.
• Net income of AED 11.6 billion was partially offset by a one-off deferred tax liability of AED 1.2 billion related to the introduction of UAE corporate income tax from 1 January 2024. Net income excluding these one-off items is AED 1. 9 billion yuan, the same as the previous year.
• Capital expenditure was AED 1.1 billion, an increase of 26% compared to the previous year.
• Generated free cash flow of AED 4.3 billion, 31% higher than the previous year, despite higher capital expenditures.
• Total debt at AED 59.8 billion, down from AED 61.7 billion at the end of 2022, further improving the Group’s credit metrics.
Strategic highlights for Q1 2023:
• Mirfa 2 RO plant: TAQA and Engie have signed a water purchase agreement with EWEC for a 120 MIGD reverse osmosis (RO) plant in Abu Dhabi, with financing expected to close soon.
• Taweelah B IWPP: TAQA announced that it has acquired an additional 10% stake in the Taweelah B Independent Water Power Plant (IWPP) in Abu Dhabi, as well as a 25% stake in the plant’s operation and maintenance (O&M) company.
• Greenhouse Gas Emissions Reduction 2022: TAQA released its third Sustainability Report, outlining the company’s goal to reduce greenhouse gas emissions by 8% by 2022, firmly on track to meet its 2030 goal.
• New Dividend Policy 2023-2025: In light of the strategic decision to retain the Oil and Gas (O&G) business, TAQA’s shareholders approved an updated dividend policy and variable dividend for 2023-2025 at the AGA held in March. Under the new structure, the fixed dividend will be 3.25 fils/share in 2023, 3.50 fils/share in 2024 and 3.75 fils/share in 2025, paid quarterly. The variable dividend component will be paid annually and based on a discretionary percentage of the annual net profit of the oil and gas business.
• 5% stake in Adnoc Gas: TAQA has a longstanding strategic partnership with Adnoc, which has been continued by recent transactions such as Masdar’s joint stake (with Mubadala) and the $3.8 billion decarbonisation of Adnoc Project offshore business. In recognition of this continuing relationship, TAQA has acquired from Adnoc an interest in 5% of the total issued share capital of Adnoc Gas, without paying cash consideration for the shares. Adnoc Gas will be listed on the Abu Dhabi Stock Exchange in the first quarter of 2023 and is an important financial asset of TAQA. Additionally, TAQA’s net income will benefit from Adnoc Gas’ dividends. According to the dividend policy announced by Adnoc Gas, TAQA is expected to receive dividends worth AED 298 million in 2023, increasing to AED 611 million in 2024.
• Expanding EV infrastructure with Adnoc Distribution: TAQA and Adnoc Distribution have agreed to collaborate on a mobility joint venture, E2Go, to build and operate EV charging infrastructure in Abu Dhabi.
Operational highlights:
• Transmission network availability for electricity and water was 98.1%, up from 98.0% a year earlier.
• Global commercial availability of power generation was 98.8%, compared to 97.3% the previous year, with growth in UAE plants being particularly significant.
• Average oil and gas production fell to 119,900 barrels of oil equivalent per day (boepd), down 5.52% from 2022 levels. The decrease was primarily due to a natural decline in production and decommissioning activities related to the later stages of the life of the Group’s UK assets.
Jasim Husain Thabet, CEO and Managing Director of TAQA Group, commented: “The TAQA Group delivered positive results in the first quarter of 2023, with our new stake in Adnoc Gas significantly boosting our net income. , the company has made great strides in delivering on our growth strategy and solid financial performance.”
“On the growth side, we expanded our stake in Taweelah B IWPP at the beginning of the year and further strengthened our capabilities by expanding into plant operations and maintenance, a key growth area of ​​our business. We partnered with Engie to develop Mirfa 2 A reverse osmosis unit which will provide 120 MIGD desalinated water.
“As we have promised, this plant is another important step in the expansion of energy-efficient reverse osmosis technology across our desalination fleet. In addition, shareholders approved a new dividend policy for 2023 to 2025 based on fixed and The combination of a variable dividend will provide attractive returns to our shareholders and is in line with our evolving business model,” he added.
After approving the financial results, TAQA’s Board of Directors also declared the first interim cash dividend of the year at 0.65 fils (approximately AED 731 million) per share, in line with the company’s new dividend policy.
In addition to the first quarter 2023 highlights, TAQA recently completed a 5-year and 10-year dual bond offering. The successful placement of US$500 million of 5-year and US$1 billion of 10-year senior unsecured notes was 10 times oversubscribed following demand from international investors, including TAQA’s first ever corporate green bond issue. The bonds were issued with the backing of the company establishing the first green financial framework for the issuance of green bonds, sukuk, loans and other debt instruments. Proceeds from the issuance will be used for eligible green projects.
The company also successfully hosted the second World Utilities Congress in Abu Dhabi, bringing together key players from across the utilities value chain, including ministers from more than 20 countries. – trade arab news agency
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