Taqa's first quarter profit slides on foreign exchange losses

Company's profit attributable to shareholders was Dh6 million in the first three months of 2019

Earlier this month, ADPower transferred the majority of its power and water generation, transmission and distribution assets to Taqa in exchange for more than 106.3 billion new shares.. Courtesy Taqa

Abu Dhabi National Energy Company, or Taqa, said first quarter profit dropped 95 per cent because of foreign exchange losses and revaluations within its US-based power asset.

The state-owned company's profit attributable to shareholders was Dh6 million in the three months ending March 31 from Dh110m in the prior-year period, Taqa said in a statement to the Abu Dhabi stock exchange on Thursday, where its shares are traded. Quarterly revenue dipped slightly to Dh 4.33 billion versus Dh4.34bn year-on-year.

"Taqa continues to demonstrate the resilience of its business model despite the various external challenges," said Saeed Mubarak Al Hajeri, Taqa's chairman. "We are also extremely pleased to make progress on our strategic priorities by maintaining our capital discipline whilst reducing our total debt levels."

Taqa, in which utilities regulator Abu Dhabi Water and Electricity Authority holds a majority stake, more than doubled its net profit in 2018 from the previous year, due to higher revenue driven by rising oil prices in Europe and the strong performance of its power and water division.

Net foreign exchange losses reached Dh65m in the first quarter compared to Dh3m in the same period last year.

"The bottom line was impacted by uncontrollable items, namely foreign exchange losses and adverse movements on mark-to-market revaluations within its US-based power asset," Taqa said in a press statement.

Taqa's oil and gas production rose slightly to 126.7m barrels of oil equivalent per day in the first quarter versus 123.8m boe/d in the same quarter last year.

Taqa reported a 1 per cent increase in earnings before interest, tax, depreciation and amoritisation of Dh2.4bn during the quarter from a year ago, driven by the performance of its oil and gas unit.

The company reduced its total debt by Dh907m during the quarter, mainly drived by scheduled driven by scheduled project debt repayments, it said.