Sharjah-based Dana Gas, one of the largest private natural gas companies in the region, swung to a record net profit in 2021 as revenue surged amid higher oil prices.
Net profit for the 12-month period to the end of December climbed to $317 million, compared to a loss of $376m in 2020, the company said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
Profit included other income of $608m related to an arbitration award against the state-owned National Iranian Oil Company. However, that was partially offset by impairments of $451m related to UAE gas assets and goodwill.
Adjusted net profit for last year, excluding other income and impairments, came in at $128m, a more than 250 per cent rise from 2020 adjusted profit of $36m, which reflects a robust underlying operating performance, the company said.
Revenue increased 30 per cent year-on-year to $452m in 2021, supported mainly by higher oil prices and increased production in Kurdistan Region of Iraq (KRI).
“We closed the year on a strong financial footing as a result of a robust operational performance over the last 12 months, said Patrick Allman-Ward, chief executive of Dana Gas.
“We had record gas and LPG production in the KRI in December, achieving a 50 per cent growth in gas production over the past three years as well as record collections of $377m, all of which contributed to our record profit.”
Average group production fell 2 per cent year-on-year during 2021 to 62,100 barrels of oil equivalent per day, mainly driven by a 7 per cent annual decline in Egypt production to 28,300 boepd. The production decline was offset by a 5 per cent jump in output from the KRI, which reached 33,800 boepd at the end of 2021.
In the KRI, the KM250 gas expansion project currently under way at the Khor Mor plant is progressing on schedule, with the project now fully financed after securing a seven-year $250m loan from the US International Development Finance Corporation in September 2021.
The company, which spent about $126m in capital expenditure in 2021, is expected to maintain the same level of spending this year. It does not have immediate requirement to raise further debt, Mr Allman-Ward said during a media earnings call.
Cash balance at year-end stood at $185m, an increase of 70 per cent compared to $109m at the end of 2020. The cash balance includes $67m held by Pearl Petroleum, of which Dana Gas has a 35 per cent share.
The group collected a total of $377m in 2021, up from $182m in collections in 2020. Egypt and KRI contributed $193m and $184m respectively.
Collections from Egypt and the KRI rose 107 per cent year-on-year in 2021, marking a record for the company on the back of a strong rebound in oil prices, an accelerated pace of payments from Egypt and the settlement of past outstanding KRI receivables from 2019 and 2020.
The company’s Egypt receivables stood at $24m at the end of December, the lowest level since Dana Gas started operations in the country in 2007. Total outstanding receivables in KRI at the end of last year came in at $43m.
"The decrease in receivables in Egypt and the payment of past outstanding receivables in the KRI further strengthened the company’s balance sheet and allowed the additional interim dividend payment of 3.5 fils per share," Dana Gas said.