TAQA Fourth Quarter and Full Year 2009 Financial Results

Published March 17th, 2010 - 08:26 GMT

Abu Dhabi National Energy Company PJSC (“TAQA”), a publicly listed company on the Abu Dhabi Securities Exchange (ADX: TAQA), today reported its Fourth Quarter and Full Year 2009 financial results.

 

Key highlights for the full year 2009:

  • Total revenue was AED 16.9 billion, flat compared with AED 16.8 billion for 2008. Decreased upstream revenues for the year were due to a decline in realized crude oil and natural gas prices. This was partially offset by additional revenue from TAQA’s North Sea assets acquired in December 2008, the full year impact of the expansion of Taweelah B, which was commissioned in October 2008, new production at <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Fujairah 1 from March 2009 and the inclusion of the Red Oak tolling contract acquired in December 2008.

  • Cost of sales were AED 12.7 billion in 2009, an increase of 26% over AED 10.1 billion in 2008, primarily due to AED 1.7 billion of costs related to TAQA’s northern North Sea assets acquired in December 2008.

  • Included in the Cost of Sales is an impairment provision of AED 538 million (net of a reversal of previous impairments) relating to the oil and gas assets at TAQA Bratani and TAQA NORTH.

  • EBITDA was AED 7.4 billion for 2009, versus EBITDA of AED 9.4 billion in the same period in 2008. 

  • Net profit, after minority interests, was AED 182 million compared with AED 1.8 billion in 2008 while basic earnings per share was 3.6 fils for the period, compared with 36 fils for the same period in 2008.

  • Net debt to capital (including minority interests) was 81%, a decrease from 84% at the end of 2008 and 82% at the end of Q3 2009.

 

Comment

Carl Sheldon, General Manager of TAQA, said

“This has been a challenging 12 months for TAQA but I am proud of our achievements. Having grown and diversified our portfolio over the preceding years, we benefited from strong performance from our Power & Water business, partially offsetting the lower commodity prices in our Upstream activities.

We are now implementing the next stage of our growth strategy by identifying and executing the organic opportunities our portfolio offers. We started this in 2009 and have already seen results throughout the business, such as the Jorf Lasfar expansion project, Bergermeer Gas Storage and the optimisation of our recently-acquired North Sea wells.

We have strong foundations for 2010: our diversified portfolio of assets; opportunities for organic growth; experienced management team; reliable cash flows; and strong liquidity. With these factors in mind, I am confident in the outlook for the next 12 months and beyond.”

 

 

 

Financial Results

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Operational Highlights

Power & Water

  • TAQA’s international and domestic Power and Water business contributed 46% of total revenues during 2009. 

  • As at 31 December 2009, TAQA’s Power & Water operations represent total global generation capacity (gross) of 13,729 MW.

  • During 2009, total power production was 65,012 Gwh, an increase of 36% over 2008. Total power production comprised 37,629 Gwh in the domestic market and 27,383 Gwh internationally.

  • TAQA’s total water desalination for the period was 207,266 MIG an increase of 8% over 2008, with an installed capacity of 654 MIGD.

  • Technical availability of the power generation businesses averaged 94% compared with 93% in 2008. The average availability of the domestic plants was 96% and the international average availability was 88%.

 

Upstream and Midstream

  • Upstream activity generated revenues of AED 7.3 billion (including gas storage and other revenue), 54% of total revenues.

  • Total production was 134,898 barrels of oil equivalent per day (mboe/day) in 2009, split between TAQA NORTH (89,906 boe/day), TAQA Bratani (38,221 boe/day) and TAQA Energy (6,771 boe/day), and is up from 114,100 boe/day in 2008.

  • TAQA Bratani has shown the greatest production increase, with production growing from 13,700 boe/day to 38,221 boe/day, an increase of 179% over 2008, largely due to the increased production from the assets acquired in December 2008.

  • TAQA NORTH production declined by 4% due to decreased capital investment as a result of lower gas prices.

  • In 2009, Brent crude averaged US$51/bbl and WTI averaged US$50/bbl, versus US$76 and US$75 respectively in 2008. Similarly, Nymex Henry Hub gas prices averaged US$3.50/mmbtu in 2009, versus US$7.<?xml:namespace prefix = st2 ns = "Bloomberg.OfficeTools.SmartTag" />50 in 2008.

  • Average net realized price of crude oil sold was US$55.82 per barrel for TAQA NORTH and US$60.54 per barrel for TAQA Bratani.

  • Average net realized price for natural gas sold was US$4.06 per thousand cubic feet (mcf) for TAQA NORTH, US$5.64 per mcf for TAQA Bratani and US$8.00 per mcf for TAQA Energy.

 


Key highlights for the fourth quarter of 2009:

  • Total revenue reached AED 4.4 billion compared with AED 3.7 billion for the same period in 2008, an increase of 16% due a recovery in crude oil prices and the inclusion of the northern North Sea assets.

  • TAQA recorded a net loss, after minority interests, of AED 84 million compared with a net profit of AED 232 million in the same quarter in 2008, due to an impairment charge of AED 538 million (AED 214 million after-tax).

  • EBITDA of AED 1.6 billion for Q409 was flat compared with AED 1.6 billion in the same period in 2008. 

 

Significant activities in Q4 2009

In relation to the Bergermeer Gas Storage project, the consortium and Gazprom confirmed the final investment decision on the project in October. The consortium will invest €800 million in the construction and design of the gas storage facility. TAQA is the operator and holds a 36% interest in the project. Bergermeer Gas Storage is expected to become north west Europe’s largest commercial underground gas storage facility and will contribute to the development of the Netherlands into a main gas hub.

 

In October, TAQA Energy closed a transaction to purchase 100% of the share capital of DSM Energie Holding B.V. (DSM Energy) for €285 million, spanning both its upstream and midstream portfolios.  TAQA Energy acquired non-operated interests in the pipeline company Noordgastransport B.V. (NGT), three other pipelines and 20 producing oil and gas fields in the Dutch North Sea.  Furthermore, the assets provide TAQA Energy with additional daily production of approximately 5,000 barrels of oil equivalent (2008 average) of which 85% is natural gas. 

 

Also in October, TAQA Bratani brought its first new North Sea oil well on stream. The well was drilled from the TAQA Bratani operated North Cormorant platform and was completed safely, on time and within budget.

 

Post period developments

On 4 March, Moody’s Investors Services downgraded TAQA’s corporate credit rating from Aa2 (review for downgrade) to A3 (stable). This was as a result of a change in Moody’s ratings criteria that apply to government related issuers as a whole. All Abu Dhabi government related issuers were downgraded. The support for TAQA from the Government of Abu Dhabi remains unchanged. As the Government stated in their press release following the Moody’s announcement, TAQA "plays an important role in the Emirate's energy policy."

 

During a meeting of the Board of Directors on 16 March 2010, the board recommended a dividend of 10 fils per share. This dividend is subject to shareholder approval at the company’s Annual General Meeting to be held on 20 April 2010.

 


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