ABU DHABI, 29th June, 2020 (WAM) — TAQA, the Abu Dhabi National Energy Company today announced that its earnings for the first quarter of 2020 has seen revenues decline 9 percent to AED 4 billion, reflecting a 21 percent drop in the price of oil and gas sold by the company on the same period last year.
In a statement today, TAQA, also known as ‘the Group’, said that EBITDA also fell 18 percent to AED 1.9 billion, reflecting weaker revenues as well as higher operating expenses within the Oil and Gas business.
“As a result of the significant and prolonged effects on oil demand due to COVID-19, and in line with peers, the Group reduced its 2020 and 2021 oil price assumptions, requiring a write down of the Group’s carrying amounts of certain oil-specific assets with a post-tax, bottom-line impact of AED 1.5 billion. The loss attributable to TAQA’s shareholders for Q1 2020 was AED 1.7 billion driven by the above-mentioned impairment charges,” the statement read.
TAQA’s liquidity as at quarter-end remained strong at AED 11.9 billion, including AED 2.6 billion in cash and cash equivalents and AED 9.3 billion of undrawn credit facilities.
Despite the challenging start to the year, TAQA said it is looking ahead and is well positioned to continue benefiting from stable revenue streams. The transaction to transfer the majority of Abu Dhabi Power Corporation’s water and electricity generation, transmission and distribution assets to TAQA, was approved earlier in April by TAQA’s shareholders and remains scheduled to close in the third quarter of 2020.
“Once the transaction completes, TAQA will be a top-10 integrated utilities player in Europe, the Middle East and Africa, EMEA, by regulated assets and one of the largest publicly listed companies in the UAE, based on market capitalisation. TAQA will generate recurring, stable income with more than 85 percent of its revenues and EBITDA coming from regulated and long-term contracted businesses, supplemented by oil and gas assets. The Group will have a stronger long-term capital structure, which is expected to enable sustainable dividend distributions to shareholders, as well as the financial firepower for new investment both to enhance efficiency and to expand through new ventures,” the statement added.
“Our results continue to demonstrate the value of a stable power and water business in a low and volatile commodity price environment,” said Saeed Al Dhaheri, TAQA CEO. “Nonetheless, the advent of the COVID-19 pandemic has weakened demand across multiple sectors globally, impacting our results for the quarter, as for many others with exposure to the oil and gas sector.
“As we look to close the landmark transaction with ADPower in the upcoming weeks, TAQA will not only become a fully integrated utility, but will benefit from the financial strength to lead the UAE’s power and water sector transformation.”