Acquisitions triple Taqa's net profit

A surge in its oil revenues following a spate of major global acquisitions more than tripled the net profit of the Abu Dhabi National Energy Company (Taqa) in the first half of this year, the company said yesterday.

Net earnings of the government-controlled company jumped by 249 per cent to Dh869 million in the first half of 2008 from around Dh249m for the same period in 2007, Taqa said in its first half and second quarter balance sheet.

"The increase is due to the acquisitions made since the first quarter of 2007, as well as the impact of higher oil and gas prices," it said.

Basic earnings-per-share leaped by around 249 per cent to 21 fils for the first six months of 2008, compared with six fils for the same period in 2007.

Earnings before interest, tax, depreciation and amortisation (Ebitda) shot up by 152 per cent to Dh5.2 billion from Dh2.1bn, while total revenue nearly quadrupled to Dh8.6bn from Dh2.8bn in the same period. Revenue from oil and gas activities hit an all-time high of Dh4.2bn, compared with only Dh153m for the same period in 2007.

"This increase reflects the acquisition of upstream assets in North America and Europe since the first quarter of 2007. High average oil and gas prices experienced during the period have also been a contributing factor," the statement said.

Revenue from the electricity and water business grew by 24 per cent to Dh 2.6bn, from Dh2.1bn, excluding revenues from supplemental fuel sales.

Revenue derived from gas storage jumped to Dh302m from Dh 80m. As for the second quarter, Taqa's net profits leaped by 154 per cent to Dh471m, from Dh186m in the same quarter in 2007.

The increase reflects profits from Taqa's acquisitions as they have been integrated into the company as well as the impact of higher oil and gas prices, it said.

Basic earnings-per-share rocketed by 154 per cent to 11 fils for the quarter, compared with four fils for the same period in 2007.

Ebitda soared by around 156 per cent to Dh2.9bn from nearly Dh1.1bn in the same period. Total revenue jumped by 155 per cent to Dh4.6bn from Dh1.8bn, while earnings from oil and gas activities surged to Dh2.3bn from Dh77m. A breakdown for the second quarter showed the upstream and midstream businesses generated revenue of Dh2.5bn, representing 55 per cent of total revenue.

Total production for the second quarter averaged 119,200 barrels of oil equivalent per day (mboe/day), split between Taqa North (96,700 mboe/day), Taqa Energy (7,400 mboe/day) and Taqa Bratani (15,100 mboe/day).

The downstream business generated revenue of Dh2.1bn in the second quarter, comprising 45 per cent of total revenue.

CEO Peter Barker-Homek said: "These results show the significant change in the nature of our business compared to just 12 months ago.

"While our domestic power generation and water desalination assets have continued to deliver solid performance, we are now seeing the full impact of the acquisitions made in the past year on Taqa's results.

"High oil and gas prices have also boosted growth in revenue and profits. For the second quarter in a row we have seen profit growth of more than 150 per cent in a year-on-year comparison, and 32 per cent compared with the first quarter of 2008.

"This substantial growth is reflected in earnings per share of 21 fils for the first six months of 2008 compared to six fils last year… Our focus now, as a management team, is to ensure the continued and effective integration of these, and other high-quality assets, into Taqa's business.

"This process has been under way for some time and, as you would expect, we are already seeing the benefits of this."