TAQA H1 2019 revenue up 5%, led by oil and gas business
The oil and gas unit of TAQA saw an 11% increase in revenue, due to increased production volumes out of Europe and Iraq
Abu Dhabi National Energy Company (TAQA) recorded a 5% increase in its H1 2019 revenue to $2.5bn, compared to H1 2018. The growth was driven by its oil and gas business, which saw an 11% increase in revenue which the company attributes to increased production volumes from its assets in Europe and Iraq. Its average production increased 3% to 124,760 barrels of oil equivalent per day.
“Our solid performance in H1 2019 is underpinned by our strong operational performance," noted TAQA Chairman Saeed Mubarak Al Hajeri. "The Group’s balance sheet remains healthy, and with stable revenues and a further reduction in debt coupled with strong liquidity we remain on course to meet our long term objectives. The recent ratings affirmation from Moody’s is a testament to the stability of our operational performance."
However, its net profit dipped 23% to $58mn for H1 2019, compared to $75.7mn for the same period in 2018. The company noted in a press release that its results were impacted by one-off costs. It attributed the drop in profit to "unfavourable mark-to-market (MTM) revaluations within its US-based power asset, an increased deferred tax charge due to changes in Alberta provincial tax rates and a reduction in share of results from investments in associates."
Still, strong performance of the group’s oil and gas business delivered a 15% improvement in EBITDA of $52.54mn. TAQA's overall capex also rose 15% to $260.5mn in the first six months of 2019. The increase in oil and gas capex was largely driven by the $31.6mn acquisition of an additional 7.5% working stake in the Atrush Block from Marathon Oil Kurdistan B.V. in May of this year. The acquired stake increases TAQA’s working interest in the project from 39.9% to 47.4%.
"We also made exciting progress in advancing our strategy of maintaining capital discipline with focused investments in our core assets, such as the Atrush Block," Al Hajeri added. "Looking ahead, we remain optimistic and believe that our investments in the UAE and other strategic markets will contribute to a sustained growth story."
Additional capex in Iraq was focused on bringing new wells on stream and the impact of debottlenecking work to increase the capacity of the current production facility. As a result, TAQA’s entitlement production increased to 5,728 barrels of oil equivalent per day in H1 2019, a 149% improvement compared to the previous year.
TAQA’s liquidity as of June 30, 2019 remained strong at $3.48bn. The group also reduced its debt, which stood at $17.56bn, a decrease of approximately 3% from its debt of $18bn as of December 31, 2018.