UAE's TAQA posts tiny Q2 profit on higher oil and gas prices

ABU DHABI - 10 August 2017: Abu Dhabi National Energy Co (TAQA) said on Thursday that it swung to a tiny profit in the second quarter from a year-earlier loss, aided by higher oil prices and a one-off gain.

The state-owned oil explorer and power supplier made a profit attributable to shareholders of 35 million dirhams ($9.5 million) in the three months to June 30, compared with a 588 million dirham loss a year ago.

TAQA suffered a full-year loss for 2016 of 18.55 billion dirhams because of impairments related to its oil and gas assets as energy prices slumped, but it has made profits in both quarters so far this year.

Revenues in the second quarter edged up to 4.2 billion dirhams from 4.0 billion dirhams in the prior-year period. Brent crude oil averaged $50.13 a barrel in the latest quarter versus $46.01 a year ago, TAQA said.

Profit was boosted by an 86 million dirham gain from “de-recognition of a subsidiary”. In May TAQA pulled out of its wholly owned subsidiary in India, Himachal Sorang Power Ltd.

“We did not view Sorang as core to our long-term power and water strategy as it is a relatively small and un-contracted power asset,” a TAQA spokesman told Reuters, adding that it did not have significant synergies with the rest of the company's power and water business.

But TAQA remains committed to its other India project, a 250 megawatt lignite-fired power plant in the southern state of Tamil Nadu, he said.

TAQA said it was on track to meet a target of 1.8 billion dirhams of capital spending this year after it spent 619 million dirhams in the first half of 2017.

The company’s total debt fell to 70.5 billion dirhams in June from 72.2 billion dirhams last December.

In April, the Abu Dhabi Water & Electricity Authority raised its stake in Taqa to 74 percent from 52.4 percent after granting TAQA land valued at 18.7 billion dirhams that could potentially offset accumulated losses.

TAQA, which operates in 11 countries, also said in April that it might sell some of its oil and gas interests in North America to raise capital for its core business. In July, TAQA said it had started oil production at its Atrush Block in the Kurdistan region of Iraq with initial production expected to be around 30,000 barrels of oil equivalent per day.