TAQA Preliminary Financial Results for FY 2012

06 Feb 2013

TAQA makes strong progress toward its strategic objectives

Revenues up 14%, net profit affected by commodity prices, UK tax charges



Abu Dhabi, UAE - Abu Dhabi National Energy Company PJSC (TAQA), the international energy company (ADX: TAQA), today reported its preliminary, unaudited financial results for the year ending 31 December 2012.

These preliminary results are subject to changes that may result from the final determination of certain accounting estimates.

Comprehensive, audited full year 2012 results are due to be published on 13 March 2013.

(AED million)

FY 2011 Actual

FY 2012 Preliminary

% change

Total assets

114,693

122,371

7%

Revenues

24,187

27,513

14%

Gross Profit

8,500

7,863

-7%

Net profit

744

640

-14%

Earnings per share (fils)

12

11

-8%

TAQA reported strong operational performance with top line revenue growth of 14% due to higher power and construction revenues offset by lower supplemental fuel revenues and oil and gas revenues. Overall gross profit declined by 7%, principally due to lower production and revenues in our oil and gas business, which was affected by weaker North American gas prices.

The increase in total assets was primarily due to the expansion of the Jorf Lasfar project in Morocco, the construction of the Gas Storage Bergermeer project in Netherlands, an advance payment towards the acquisition of BP’s interests in oil and gas assets in the Central North Sea and the acquisition of a 53.2% interest in the Atrush block in the Kurdistan region of Iraq. The increases were partially offset by divestments of certain non-core assets in Canada and the sale of our shares in Tesla Motors and WesternZagros.

Net profits declined by 14% partially due to a one-off charge restricting tax relief on decommissioning expenditures in the UK North Sea, lower North American gas prices and aluminium prices, a lower margin on back-up fuel at our UAE power stations and higher finance costs from new bond issues against repayment of maturing bonds. Partly offsetting these declines, we recognised a gain on divestments as described above and lower impairment charges in North America.

Comment

Carl Sheldon, Chief Executive Officer of TAQA, said:

“This was a year of significant strategic achievements for TAQA across our range of businesses that position us well for the future. We have made great progress against our strategic objectives of expanding our power business in the MENA region, entering Iraq and signing a Memorandum of Understanding with the Turkish Government to develop power production and associated assets in Southern Turkey. Our expansion projects at Jorf Lasfar and Takoradi have also continued apace. 

Our Oil and Gas business has also performed well, with a strategic acquisition in the UK North Sea securing the long-term future of what has historically been one of our most profitable geographies. The acquisition of the interest in the Atrush field in the Kurdistan region of Iraq is an excellent example of our growing maturity as an upstream operator and our tolerance for political risk in the Mena region. The start of construction of the gas storage facility at Bergermeer is a milestone and the team also completed a second successful open season for capacity in December.

TAQA is better positioned than ever to capitalise on the growth opportunities inherent in our businesses. Our extensive experience as an operator of complex energy assets, coupled with our strong financial position, gives us access to unique opportunities whilst continuing to optimise our existing activities.”

Corporate activity during 2012

During the 12 month period, TAQA completed the following corporate initiatives:

  • December: TAQA signs a US$2.5 billion Dual Tranche Multi-currency Revolving Credit Facility to finance its general corporate requirements.
  • December: TAQA successfully completes a US$2 billion dual tranche bond issue. The transaction was the largest non-sovereign US$-denominated issuance from the MENA region in 2012 and has secured the lowest coupons ever achieved by the company for 5-year and 10-year funding. The two tranches consisted of:
    • US$750 million five year bond at a yield to maturity rate of 2.609% (annual coupon of 2.5%)
    • US$1,250 million ten year bond at a yield to maturity rate of 3.696% (annual coupon of 3.625%)
  • September: TAQA becomes a member of the Abu Dhabi Sustainability Group (ADSG) which aims to integrate sustainability into the Emirate’s economic and social development programmes.
  • September: Edward LaFehr appointed President of TAQA North.
  • April: TAQA successfully completes the sale of all its holding in Tesla Motors for a total consideration of AED 956 million realizing a gain of AED 415 million.
  • February: TAQA successfully completes a MYR650 million Sukuk (c.US$215 million) issuance, as part of a MYR3.5 billion Sukuk programme established in November 2011.
  • January: Dr. Saif Al Sayari appointed as Executive Officer of Energy Solutions, responsible for developing TAQA’s alternative and technology - driven energy initiatives.

In addition to the above, TAQA achieved the following milestones during 2012:

Oil & Gas

  • December: TAQA  acquires a 53.2% interest in the Atrush block in the Kurdistan region of Iraq from General Exploration Partners, Inc., an affiliate of Aspect Holdings, LLC. The acquisition builds on the UAE’s strong bilateral bonds with Iraq and marks TAQA’s evolution into an oil and gas operator in the Middle East and North Africa.
  • November: TAQA disposes of its entire holding in WesternZagros Resources Ltd. for US$85 million.
  • November: In the UK North Sea, TAQA signs an agreement to purchase certain BP oil and gas assets worth more than US$1 billion. The acquisition, which is targeted to close in the middle of 2013, is expected to increase TAQA’s net production by approximately 21,000 barrels of oil equivalent per day (boe/d), and will add a second major development hub to TAQA’s UK North Sea business.
  • October: TAQA discovers a new oil accumulation by well 211/21-N94 known as the Contender prospect, in the UK Northern North Sea Block 211/22a.
  • September: TAQA acquires assets from NuVista bringing 5,000 bpd of production, ownership of mid-stream assets and growth opportunities.
  • May: TAQA receives unconditional approval from the Dutch Council of State for the development of the Bergermeer Gas Storage facility and commenced construction.
  • March: TAQA completes the disposal of US$600 million of non-core assets in southeast Saskatchewan, Canada

Power & Water

  • December: TAQA acquires an interest in Himachal Sorang Power Limited (HSPL), the developer of a 100MW hydroelectric plant in the northern Indian state of Himachal Pradesh.
  • October: A pre-feasibility study is completed and an investment model prepared for a major power project in the Afş‏in-Elbistan region of southern Turkey in co-operation with Electricity Generation Co. Inc. (EÜAŞ). The Government of the Republic of Turkey and the Government of the Emirate of Abu Dhabi signed a “joint declaration” for the co-operation between EÜAŞ and TAQA regarding investment in and optimisation of the existing lignite power plant in the Afş‏in-Elbistan region; the development of mines; and the establishment of new power plants in the same region.
  • July: TAQA secures the requisite parliamentary approval and signed financing arrangements for the 110 MW expansion of the gas-fired Takoradi 2 power plant in Ghana.
  • June: TAQA signs financing arrangements for US$1.4 billion equivalent of 16-year, multi-currency non-recourse project financing for the 700MW expansion of TAQA’s Jorf Lasfar coal-fired power complex in Morocco.

Energy Solutions

  • December: TAQA agrees to buy a 50% interest in the 205.5 megawatt (MW) Lakefield wind project located in the Midwestern United States from a subsidiary of France-based utility Electricite de France SA (EDF).
  • June: TAQA signs a Memorandum of Understanding with The Centre of Waste Management Abu Dhabi for the joint development of a 100MW Waste to Energy facility in Abu Dhabi by 2015/16.

Post-period items

  • TAQA completes the conditions for drawdown under the US$1.4 billion equivalent of 16-year, multi-currency non-recourse project financing for the 700 MW expansion of TAQA’s Jorf Lasfar coal-fired power complex in Morocco.
  • TAQA and its partner, Volta River Authority, complete the conditions for drawdown under the US$330 million financing for the expansion of the Takoradi 2 power plant in Ghana.

Comprehensive, audited full year 2012 results are due to be published on 13 March 2013.

– ENDS –