Taqa’s 2022 net income rises 35% to record $2.18 billion

The strong performance for the year was driven by the execution of its growth strategy, contracting utilities business and rising commodity prices.

Taqa board proposes a final cash dividend of 3.3 fils (AED 3.71 billion) per share for 2022, bringing the full-year dividend to 5.1 fils (AED 5.74 billion) per share

Group income

Group revenue was AED 50 billion, an increase of 10.3% compared to the same period last year, mainly due to higher commodity prices in the oil and gas sector.

Adjusted EBITDA was AED 20.8 billion, up 6.7%, and capital expenditure was AED 3.8 billion, down 20.1% compared to the previous year.

Taqa is also making major investments of AED4.5 billion in 2022 (2021: Nil) in the acquisition of Masdar and projects to power and decarbonize Adnoc’s offshore production operations.

Despite a 22.3% decline compared to the previous year, free cash flow generation remained strong at AED13.8 billion for the year, mainly due to the payment of Taqa’s investment in Masdar.

Total debt was AED 61.7 billion, down from AED 65 billion at the end of 2021, further improving the group’s credit metrics.

2022 Strategic Highlights

Taqa now owns 43% of Masdar’s renewable energy business and 24% of its green hydrogen business. Masdar will drive the group’s investments in clean energy.

Taqa has committed to reducing Group-wide Scope 1 and Scope 2 emissions by 25% by 2030, including a 33% reduction in UAE portfolio emissions. Additionally, Taqa aims to reduce water distribution losses by 25% by 2030, while increasing women’s participation in management to 30% over the same period.

The group’s ESG efforts, including improved communication with all stakeholders, have been recognized by major ESG rating agencies around the world. MSCI, Sustainalytics and CSRHub significantly improved Taqa’s rating.

decarbonization project

Taqa and Adnoc have successfully completed the financial close of a decarbonisation project, the first of its kind in the region. The $3.8 billion strategic project will significantly decarbonize Adnoc’s offshore production operations through a HVDC subsea transmission network that connects Adnoc’s offshore operations to Abu Dhabi’s onshore grid.

Taqa has signed an agreement to acquire a 40% stake in the Talimarjan Power Complex. This requires investment in the privatization of gas projects and undertaking related operations and maintenance (O&M) activities.

Taqa also intends to acquire a 50% stake in EGA’s 6.4 GW generation assets and connect the EGA facility to the Abu Dhabi grid for access to clean energy.

green bond

It successfully priced AED2.6 billion green senior secured bonds to refinance debt at the Noor project in Abu Dhabi, one of the world’s largest single-site solar power plants. This is Taqa’s first foray into green finance.

Given the strategic decision taken by Taqa’s Board of Directors to retain the O&G business, it proposed an updated dividend policy for 2023 to 2025 based on a mix of fixed and variable dividends. Under the new structure, the company expects a fixed dividend of 3.25 fils/share in 2023, 3.50 fils/share in 2024 and 3.75 fils/share in 2025, payable 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.

Operating Highlights

• Transmission network availability for electricity and water was 98.6%, up from 98.4% a year earlier.

• Global commercial availability of generation was 98.1%, compared to 97.3% in the previous year, with a slight increase in the contribution of UAE power plants.

• Average oil and gas production increased to 123,800 barrels of oil equivalent per day (boepd), an increase of 1.1% over 2021.

positive trajectory

Mohamed Hassan Alsuwaidi, Chairman of Taqa, commented: “Taqa’s record performance in 2022 is a continuation of a positive trajectory built on compelling market opportunities, investment grade credit ratings and enhanced ESG ratings from global institutions. We continue to make a strong contribution to the UAE’s decarbonization goals, accelerate the energy transition and drive sustainable growth.

“As part of these efforts, the company has acquired a controlling stake in national clean energy champion Masdar, which will enable Taqa to achieve ahead of schedule its 2030 goal of deriving more than 30 percent of its electricity generation mix from renewable sources. Building on a strong track record , market leadership and bright future, Taqa is ideally positioned to achieve its strategic goals for 2030 and beyond.”

Jasim Husain Thabet, CEO and Managing Director of Taqa Group, said: “In 2022, Taqa has maintained its strategic focus, executed on its growth and ESG objectives, demonstrated tangible progress towards the goals we set out and communicated to our stakeholders. The latter demonstrates our commitment to achieving our goals. Highlights include advancing our growth strategy with the acquisition of Masdar, which will become one of the largest clean energy companies in the world. We take steps to enter new markets in Uzbekistan, and we Having achieved financial close for a key decarbonization project at Adnoc’s offshore production facilities, we announced our intention to acquire EGA’s power assets and connect the company to the Abu Dhabi grid.

Environmental, Social and Governance Strategies

“The Adnoc and EGA projects are both examples of our role in supporting the decarbonization of hard-to-abate industries, highlighting why we joined the Irena Decarbonization Alliance this year and reaffirming our commitment to our ESG strategy.

“This focus is reflected in our strong financial performance, which allows us to continue investing to achieve our ambitions without compromising strong returns. Taqa remains firmly committed to its growth and sustainability journey, while Creating value for its shareholders and stakeholders, I am optimistic about the business’s path through 2023.” — trade arab news agency