• 11 May 2011
  • Global

TAQA First Quarter 2011 Results

Total revenues increased 15% to AED 5.5 billionEBITDA increased 27% to AED 3.3 billionSolid operational performance plus progress on major growth projectsAbu Dhabi, UAE – Abu Dhabi National Energy Company PJSC (،°TAQA،±), a publicly listed company on the Abu Dhabi Securities Exchange (ADX: TAQA), today reported its First Quarter 2011 operational and financial results.All amounts in AED million unless otherwise stated(1) Excludes supplemental fuel revenue(2) Includes Oil Storage and Other Operating Revenue(3) Reflects the impact of increased tax charges in the UK North SeaSummaryImproved commodity prices, higher oil and gas production and increased power and water revenues due to the commissioning of Fujairah 2 resulted in a solid financial performance for TAQA during the first quarter of 2011. Overall TAQA’s total revenues increased 15% year-on-year while tight cost control resulted in a 27% increase in EBITDA to reach AED 3.3 billion.TAQA’s Profit Before Tax was 11% higher year-on-year, dampened by the effect of foreign exchange losses along with lower derivative gains. Net Profit After Minority Interests was AED 152 million, versus AED 287 million in Q1 2010, due to an increase in taxes for operations in the UK North Sea.TAQA has continued to progress its major organic growth projects with two key developments. Firstly, at the end of the quarter TAQA signed the contract for the construction of two additional power production units in Morocco, a major milestone in taking the project into construction.Secondly, TAQA continued to progress the Bergermeer Gas Storage project. There is broad support in the Dutch parliament and all required statutory approvals and permits to construct and operate the Bergermeer Gas Storage facility in the Netherlands are expected to be received this month.CommentH.E. Abdulla Saif Al-Nuaimi, Chief Executive Officer and Managing Director of TAQA, said:°TAQA has made a solid operational start to 2011, with strong performance from our Power & Water business and a higher contribution from our Oil & Gas assets due to a combination of improved commodity pricing and increased production. These positive results also reflect our increased footprint, where new assets ¨C such as Fujairah 2 ¨C are beginning to contribute additional revenues. We continue to be focussed on operational excellence and efficiency right across our business to ensure we deliver the maximum value possible.،± Carl Sheldon, General Manager of TAQA, said:°We remain fully committed to our focussed strategy that will enable us to continue building TAQA into a global energy company. As evidence of this, our major organic growth projects in the Netherlands and Morocco have reached significant milestones, while those in Ghana and India have made good progress. In particular, the expected receipt of permits in the Netherlands for operating and constructing Bergermeer in May has enabled us to this week launch the open season for longer-term capacity and start planning the next stage in this flagship project¯s development.±Financial SummaryTotal revenues for Q1 2011 were AED 5.5 billion, 15% higher year-on-year, compared with total revenues of AED 4.8 billion in Q1 2010.Total Oil & Gas revenues (including gas storage and other income) increased from AED 2.6 billion to AED 3.0 billion for Q1 2011. This 14% increase was primarily driven by the increase in crude oil prices, partially offset by lower North American natural gas prices.Total Power & Water revenues, excluding supplemental fuel income, increased from AED 1.5 billion in Q1 2010 to AED 1.7 billion in Q1 2011. This 13% increase was primarily driven by the contribution from Fujairah 2, which was transferred to TAQA in the third quarter of 2010 and fully commissioned in January 2011. Supplemental fuel income increased 23% year-on-year due to higher use of additional fuel supplies at TAQA’s domestic power plants.Cost of sales increased 8% from AED 3.2 billion to AED 3.5 billion. Within this, operational expenses, excluding fuel and gas storage expenses, reduced 3%. Depreciation, depletion and amortisation increased 16% reflecting TAQA’s increased asset base.Profit before Tax was 11% higher year-on-year, dampened by a loss on foreign exchange plus lower gains on derivatives.In mid-March the UK government announced changes to the tax regime for the UK North Sea which were backdated to 01 January 2011. This contributed to a 53% year-on-year increase in tax, negatively impacting Net Profit After Minority Interests which totalled AED 152 million, versus AED 287 million for the same period in 2010.Total debt and net debt increased year-on-year due to the transfer of interests at Fujairah 2 and Shuweihat 2. However, TAQA’s Net Debt/Capital ratio decreased to 79%. Net Debt/EBITDA reduced to 5.4 times for Q1 2011, versus 5.5 times at the end of Q1 2010.Operational HighlightsPower & WaterTAQA has grown to become the sixth-largest global independent power producer. Its Power & Water business performance continues to generate steady, stable cash flows, with a top-quartile performance for technical availability of power.TAQA produced 10,709 GWh of electricity and 53,380 MIG of water during Q1 2011, generating total revenues of AED 1.7 billion. The 13% increase in revenues reflects the first quarter of contribution from Fujairah 2. Global technical availability was 90% for the first quarter of 2011.DomesticTAQA implemented planned maintenance activities on its domestic assets during the winter period, when demand for power is typically lower. These important and planned activities result in a short-term increase in maintenance costs and reduced technical availability during the period, but are essential for the long-term efficiency of these high quality assets.Fujairah 2, a 2,000 MW and 130 MIGD plant located in the UAE, achieved full commercial completion in January 2011, contributing revenues during the quarter for the first time.Shuweihat 2, a 1,500 MW and 100 MIGD plant is currently under construction and is expected to be commissioned by the end of 2011.InternationalTAQA’s international power portfolio, which comprises of assets in Morocco, Ghana, India, Saudi Arabia and USA, generated 3,394 GwH of power during the first quarter of 2011.International technical availability was impacted by scheduled maintenance at Takoradi in Ghana, plus an unscheduled outage on Unit 2 in Morocco due to a transformer bushing failure which has since been resolved.In Morocco, the Jorf Lasfar 700 MW expansion project continued to progress on schedule and on budget. At the end of the quarter, TAQA signed a formal contract with the Office National de l’Electricit¨¦ (ONE) for the construction of two new production units. TAQA has appointed a Mitsui-Daewoo consortium to design and build the units, and supply all required materials and equipment. Commissioning and takeover of units 5 & 6 is planned for December 2013 and April 2014, respectively.In Ghana, scheduled major inspection and fuel flexibility project was successfully completed at Takoradi, and the plant is now capable of operating on either light crude oil or natural gas. TAQA is also progressing with expansion plans for the Takoradi combined cycle conversion project, and has short-listed EPC contractors.In India, TAQA continues to make progress in the development of the expansion project for the Neyveli plant. TAQA has obtained Terms of Reference clearance from the Indian government for the Neyveli expansion project, and is preparing detailed project report and environmental management plans.Oil & GasTAQA’s Oil & Gas business comprises strong, well-resourced centers of excellence supporting a portfolio of assets with viable growth potential.Total Oil & Gas revenues, including gas storage and other operating revenues, totaled almost AED 3.0 billion for Q1 2011, an increase of nearly AED 400 million compared to Q1 2010. This 14% uplift was driven primarily by the increase in realized crude oil prices and higher crude oil production in the UK North Sea. It was partly offset by lower North American natural gas prices.Total average global daily production for Q1 2011 increased 2% to 138.8 mboe/day, compared with136.7 mboe/day in Q1 2010 and within guidance for FY 2011.North AmericaWhile crude oil production increased, natural gas volumes decreased in North America. Total production levels were 87.3 mboe/day in the first quarter, a slight reduction compared to production volumes in the first quarter of 2010. The primary reason for this was an unusually cold winter and challenging weather conditions which both delayed completion of newly drilled wells and also required additional maintenance work on existing wells.After the close of the quarter, at the end of April, TAQA began a planned bi-annual shut down at the East Crossfield Gas Plant in Alberta, which is scheduled to last for one month. The shutdown allows for regular vessel inspections and general plant repairs that are not possible while the plant is operational.UK>Production volumes in the UK North Sea were 42.3 mboe/day in the first quarter, a 7% increase compared to the same period last year.At the end of March, TAQA signed a Heads of Agreement with Valiant, operator of the Causeway field, for the export of crude via the North Cormorant production platform. Causeway will be the first third party field to tie-back to the North Cormorant platform and production is expected to commence in 2012.TAQA also continued to make progress during the quarter in developing the Falcon field, which is on schedule to come online later this year.NetherlandsProduction levels in the Netherlands were 9.1 mboe/day and TAQA’s PGI gas storage facility recorded 100% availability for the period.Netherlands are expected to be received this month.Bergermeer Gas Storage operations are expected to start in 2013 with full commercial operations in 2014. Bergermeer Gas Storage will provide the Northwest European gas market with 4.1 billion cubic metres (BCM) (46 TWh) of seasonal storage, thereby almost doubling the Netherlands’ total storage capacity.As an open access gas storage facility, Bergermeer Gas Storage will offer a majority of its total storage capacity to the market, with up to 11.3 TWh being offered for periods of four to 10 years as part of the open season launched this week at the Flame Gas Conference in Amsterdam. This longer-term capacity is intended to be awarded to the launching customers in November 2011. The remaining available capacity will be auctioned on an annual basis with the first auction taking place close to the start of commercial operations.Commodity pricing environmentOil prices moved favourably during the quarter. WTI oil price averaged $94.45/bbl for Q1 2011 compared with $78.88/bbl in Q1 2010. Prices for Brent crude increased to an average of $105.71/bbl in Q1 2011 versus $68.43/bbl for the same period last year.Meanwhile, North American natural gas prices declined year-on-year, with Henry Hub gas prices for the quarter averaged $4.20/mmbtu, down from $4.99/mmbtu for Q1 2010.Corporate updateIn January 2011, TAQA disposed of its Marubeni TAQA Caribbean assets in line with its strategy to focus on developing TAQA’s power and water footprint in the greater MENA region.Post-period corporate developments On 19 April 2011, TAQA hosted its Annual General Meeting (AGM) during which a new Board was appointed and shareholders approved a dividend distribution of 10 fils per share. For full details please visit: www.taqa.com- ENDS -For further information:TAQA Investor Relations, Abu DhabiTanis Thacker, Head of Investor Relations and Corporate Communications
+971 2 691 4933Mohammed Mubaideen, Investor Relations Manager
+971 2 691 4964
firstname.surname@taqa.comCapital MS&LDubai – Maram Alkadhi on +971 4 367 6160London ¨C Claire Maloney / Anna Davies on +44 207 307 5330firstname.surname@capitalmsl.comAbout TAQAwww.taqa.comTAQA is a global energy company majority owned by the Abu Dhabi Government and listed on the Abu Dhabi Securities Exchange.Its activities include oil and gas, power generation and water desalination across five continents. With operations in the UK, the Netherlands and North America, the company’s oil and gas business includes exploration and production, storage and pipelines. It produces almost 137,000 barrels of oil equivalent per day in the North Sea and North America, as well as operating and developing extensive gas storage facilities in the Netherlands.TAQA is the sixth largest independent power producer in the world. Its power plants are located in the United Arab Emirates, Morocco, Saudi Arabia, Ghana, India, and the United States. TAQA is the majority owner in the facilities that provide 98% of the water and electricity requirements in the Emirate of Abu Dhabi.Established in 2005, TAQA’s entrepreneurial culture has laid the foundations for long-term sustainable growth building on its commitment to people, safety and the environment.Follow TAQA on Twitter: www.twitter.com/taqaglobal

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