Financial Results for the period ended 30 September 2008
Abu Dhabi National Energy Company PJSC, a publicly listed company on the Abu Dhabi Securities Exchange (ADX: TAQA), today reported financial results for the period ended 30 September 2008.
Key highlights for the nine months ended 30 September 2008:
Net profit after minority interests increased 318%, reaching AED 1.6 billion in the first nine months of 2008 compared with AED 381 million in the same period in 2007.
Basic earnings-per-share reached 35 fils for the first nine months of 2008, compared with 9 fils for the same period in 2007.
EBITDA increased by 144% to AED 8.3 billion for the first nine months of 2008, compared with AED 3.4 billion for the same period in 2007.
Total revenues were AED 13.1 billion for the first nine months of 2008, an increase of 145% when compared with total revenues of AED 5.3 billion for the corresponding period in 2007.
o Oil and gas revenues for the nine months ended 30 September 2008 reached AED 6.2 billion, compared with AED 462 million for the first nine months of 2007. This increase was driven primarily by the revenues from TAQA North of AED 4.8 billion comprised of the full consolidation of all three TAQA acquisitions in Canada, compared with 2007 which only included revenues from TAQA Bratani and TAQA’s Northrock acquisition from 15 August 2007.
o Total revenues from the sale of electricity and water were AED 4.0 billion for the nine months ended 30 September 2008, compared with revenues of AED 3.4 billion for the nine months ended 30 September 2007. When comparing the periods under review, the revenue of AED 874 million from TAQA Generation during 2008 compares with AED 479 million for the five month post-acquisition period in 2007.
o Gas storage revenues for the period ended 30 September 2008 were AED 391 million compared with AED 106 million for the same period in 2007. This increase was attributable to revenues from East Cantaur, part of TAQA North, which was not included in the first nine months of 2007.
Finance costs were AED 2.8 billion for the nine months ended 30 September 2008, an increase of 58% when compared with finance costs of AED 1.8 billion for the nine months ended 30 September 2007 as a result of costs related to acquisitions and on new bonds of US$ 1.5 billion issued in July 2008.
As at 30 September 2008 TAQA’s total assets were AED 85.4 billion, compared with AED 67.8 billion at 31 December 2007.
Key highlights of the results for the third quarter of 2008:
Net profit after minority interests for the quarter increased by 448% to AED 723 million, compared with AED 132 million in the third quarter of 2007.
Basic earnings-per-share showed a 310% increase to 13 fils for the third quarter of 2008, compared with 3 fils for the third quarter of 2007.
EBITDA increased 131% from AED 1.3 billion in the third quarter 2007 to AED 3.0 billion in the third quarter of 2008.
Total revenue for the third quarter increased 81% to AED 4.5 billion, compared with AED 2.5 billion for the third quarter of 2007:
o Revenue from oil and gas activities was AED 2.1 billion, compared with AED 308 million for the third quarter 2007.
o Revenue from the electricity and water business increased to AED 1.5 billion, compared with AED 1.4 billion in the third quarter of 2007, excluding revenues from supplemental fuel sales.
o Revenue from gas storage grew to AED 89 million, compared with AED 26 million for the third quarter of 2007.
In the third quarter of 2008, finance costs increased to AED 984 million from AED 644 million in the third quarter of 2007, reflecting the financing arrangements put in place to fund acquisitions made over the previous 12 months.
Upstream and midstream
• The upstream and midstream businesses generated revenue of AED 2.2 billion, representing 48% of total revenue for the third quarter of 2008. Revenues from oil and gas were impacted by lower average gas prices and lower production volumes in TAQA North during the period.
• Total production for the third quarter of 2008 averaged 110.5 thousand barrels of oil equivalent per day (mboe/day), split between TAQA North (93.0 mboe/day), TAQA Energy (6.8 mboe/day) and TAQA Bratani (10.7 mboe/day).
• The average net realized price of crude oil sold in the third quarter of 2008 was US$ 103.88 per barrel for TAQA North in North America and US$ 109.10 per barrel for TAQA Energy and TAQA Bratani in Europe. The average price for the total production in North America and Europe was US$ 104.62 per barrel.
• Average net realized price for natural gas sold in the third quarter of 2008 was US $ 9.03 per thousand cubic feet (mcf) for TAQA North and US$ 10.54 per mcf for TAQA Energy and TAQA Bratani. The average price for total production in North America and Europe was US$ 9.29 per mcf.
• TAQA North had a drilling success rate of 100% in the third quarter of 2008.
High seasonal demand in the third quarter and new capacity coming on-stream at the Taweelah B power plant increased revenues in the downstream business to AED 2.3 billion in the third quarter, comprising 52% of total revenue.
TAQA’s downstream business now has global generation capacity (gross) of 10,514 Mw. During the third quarter of 2008, total power production was 13,602 Gwh, made up of 9,904 Gwh in the domestic market and 3,698 Gwh internationally.
• TAQA’s total water desalination in the third quarter of 2008 was 48,306 million Imperial gallons.
• Technical availability of the power generation businesses in Q3 2008 averaged 95.2%, with an average domestic availability of 95.4% and an average international availability of 94.9%.
Peter Barker-Homek, Chief Executive Officer of TAQA, said:
“The past quarter has seen TAQA consolidating its position across its core target markets, while continuing to monitor global opportunities for further acquisitions. Today’s results are testament to the benefits of our diversification strategy. While revenues during the third quarter derived from oil and gas were dampened by lower average commodity prices, the growing strength of our midstream and downstream portfolio has acted to mitigate this. The positive impact of the acquisitions we have made is directly visible in our bottom line.
As I look forward into 2009, we are well financed. Equipped with extensive available credit facilities, we do not have any short term refinancing needs. As a result, our strategic plan remains unaffected by recent events in financial markets and we continue to build a strong operational track record of which I am immensely proud.
Our team continues to drive the integration of the assets we have acquired, delivering high performance and maintaining our commitment to the highest standards of health and safety and environmental stewardship. This operational excellence will continue to play a crucial part in our ability to deliver sustainable business growth that takes into account all risk factors.”
Corporate activity during the third quarter 2008
In June, TAQA announced the issuance of AED 4.15 billion of convertible bonds which converted into common shares on 1 September 2008 at an exchange ratio of 500 shares for each AED 1,000 bond. Accordingly, 2,075 million new ordinary shares were issued and the company’s paid up share capital was increased by AED 2,075 million to AED 6,225 million.
The new shares commenced trading on the Abu Dhabi Securities Exchange on 16 October 2008.
On 7 July 2008 TAQA announced that TAQA Bratani had signed a Sale and Purchase Agreement with Shell U.K. Limited and Esso Exploration and Production (UK) Limited (‘the Vendors’) to purchase the equity pertaining to operating licenses for six offshore fields.
In September, TAQA agreed to purchase EnCore Oil Nederland B.V., a wholly owned subsidiary of EnCore Oil plc, whose only asset is a 10% interest in the Amstel field offshore the Netherlands, for US$ 5.5 million in cash on completion. Following completion of the transaction, EnCore Oil Nederland B.V. will be integrated into TAQA Energy B.V.
On 26 September TAQA completed the sale of a 20% interest in Shuweihat CMS International Power Company (SCIPCO) and a 50% interest in Shuweihat O&M Limited Partnership ("SOMLP") to Sumitomo Corporation. TAQA retains a 54% interest in SCIPCO.
Note on comparative data
Since the beginning of 2007, TAQA has completed a number of acquisitions which have been fully or partially consolidated into the period under review. The effect of these acquisitions should be considered when making year-on-year comparisons.
In the second quarter of 2007, TAQA completed the acquisition of CMS Generation, contributing two months of revenue to that quarter. In subsequent months TAQA acquired Northrock Resources and Pioneer Canada, significantly increasing the company’s upstream assets. The largest company acquisition to date, PrimeWest, was completed on 16 January 2008.
About Abu Dhabi National Energy Company PJSC (TAQA)
Founded in 2005, TAQA (Abu Dhabi National Energy Company (PJSC)) is a global energy company with a growing asset base of AED 85 billion (US$ 23.4 billion). One of the largest companies listed on the Abu Dhabi Securities Exchange (ADX), with 2007 revenue of more than AED 8 billion (US$ 2 billion), TAQA is a flagship corporation for the Government of Abu Dhabi.
TAQA’s strategic goal is to build and operate a geographically diverse global portfolio of energy businesses across the value chain. It has operations in power generation, water desalination, upstream oil/gas, pipelines, and gas storage.
TAQA employs approximately 2,800 people from 38 different nations and operates from its offices in: Abu Dhabi; Ann Arbor, Michigan; Aberdeen; Amsterdam; Calgary and The Hague. This footprint is further extended through alliances with partners across Africa, the Middle East, Europe, North America and India.
TAQA carries Aa2 and AA- credit ratings from Moody’s and S&P respectively.