Taqa’s second-quarter profit jumps 63% on higher oil revenue

Net income for the April to June quarter climbed to $628m

Taqa's revenue during the second quarter of 2022 jumped about 10 per cent to Dh13 billion. Victor Besa / The National

Abu Dhabi National Energy Company, better known as Taqa, reported a jump in second-quarter profit of about 63 per cent as higher oil prices drove up revenue.

Net profit attributable to equity holders for the three months to the end of June rose to Dh2.31 billion ($628 million), the company said in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Total revenue during the period jumped by about 10 per cent to Dh13bn, with revenue from oil and gas operations surging 47 per cent to Dh2.6bn.

First-half net profit rose 50 per cent to Dh4.28bn as group revenue climbed 15 per cent to Dh25.4bn during the six-month period.

Capital expenditure in the first six months of 2022 dropped 10 per cent annually to Dh1.8bn, mainly due to lower expenditure in the transmission and distribution segment, the company said.

“Taqa group has closed the first half of 2022 with strong financial results that showcase our continued strong performance and our robust business model as a fully integrated utility champion for Abu Dhabi and beyond,” said group chief executive and managing director Jasim Thabet.

“In the first six months of this year, Taqa has already made great strides in its growth strategy and in executing our ambitions for the future.”

Taqa said last month that it was retaining the vast majority of its oil and natural gas assets after strategic review that lasted about a year.

Oil prices gained 67 per cent in 2021 as the global economy bounced back from the coronavirus-induced slowdown. They have remained volatile this year as Russia’s military assault on Ukraine continues.

Brent, the global benchmark for two thirds of the world's oil, is up more than 23 per cent since the start of this year, after falling from a recent peak of $123 a barrel.

Brent was trading 0.83 per cent lower at $95.51 a barrel at 11am UAE time on Wednesday. West Texas Intermediate, the gauge that tracks US crude, was down more than 1 per cent at $89.58 a barrel.

Chairman Mohamed Alsuwaidi said Taqa had continued to deliver on its growth ambitions to be “the low carbon power and water champion of Abu Dhabi and beyond, and this is reflected in its results for the first half of the year”.

“Notably, we have made progress on our clean energy journey, having entered into binding agreements for the acquisition of a stake in Masdar,” he said.

As part of the transaction, Taqa will acquire a 43 per cent controlling stake in Masdar’s renewables business, with Mubadala retaining a 33 per cent interest and Adnoc owning the remaining 24 per cent interest.

It will also hold a 24 per cent stake in Masdar's new green hydrogen joint venture while Adnoc will hold a 43 per cent controlling stake and Mubadala will retain a 33 per cent interest.

The deal will create a “global clean energy powerhouse that consolidates renewable energy and green hydrogen efforts under a unified brand and further accelerate Taqa’s growth trajectory”, Mr Alsuwaidi, said.

“The partnership also sets out to transform the energy landscape, both in Abu Dhabi and on a global scale, supporting the country’s own ‘Net Zero by 2050 Strategic Initiative’ and cementing its role as a leader driving global energy transition efforts.”

The UAE, the Arab world’s second-largest economy, aims to become carbon neutral by 2050. It is investing Dh600bn in developing new clean energy projects to reach the target.

Taqa is also teaming up with Emirates Global Aluminium, Dubal Holding and Emirates Water and Electricity Company to further develop solar power capacity in Abu Dhabi.

As part of the deal, Taqa and Dubal Holding plan to acquire EGA’s power-generation assets in the UAE, with each company holding a 50 per cent stake.

Taqa’s board also declared an interim cash dividend of Dh675m (0.60 fils per share). This will be the second quarterly dividend payment planned for the financial year of 2022, in line with the company’s dividend policy, the company said.