UAE’s TAQA Group posts Dhs13.5bn in H1 net income

TAQA, also known as Abu Dhabi National Energy Company, posted Dhs13.5bn in half-year net income, driven by a one-off gain of Dhs10.8bn recognised on the acquisition of a 5 per cent shareholding in ADNOC Gas.

Net income was in part offset by a one-off Dhs1.2bn deferred tax liability associated with the introduction of UAE corporate income tax.

However, excluding these one-off items, TAQA’s income plunged 9 per cent to Dhs3.9bn due to lower contribution from the oil and gas business.

The utility firm said its revenues in the six months to June 30 reached Dhs26.8bn, a 5 per cent year-on-year increase, thanks to higher pass-through bulk supply tariffs and transmission use of the system within the group’s transmission and distribution segment.

TAQA’s board of directors declared a second interim cash dividend for the year of 0.65 fils per share (approximately Dhs731m), in line with the company’s new dividend policy.

The energy firm’s earnings before interest, taxes, depreciation and amortisation (EBITDA) during the period dropped by 7 per cent to Dhs10.5bn, due to the decline in contribution from the oil and gas portfolio.

Its free cash flow in H1 2023 stood at Dhs6.4bn, down 23 per cent from the same period a year earlier while its gross debt of Dhs61.7bn remains unchanged on the amount outstanding at the end of 2022.

“As TAQA continues to expand its footprint locally and internationally, we are delivering value for our shareholders whilst ensuring safe, sustainable, and secure power and water for the communities we serve around the world,” Jasim Husain Thabet, TAQA’s group CEO and managing director.

TAQA’s growth strategy

Meanwhile, TAQA entered into definitive agreements to acquire Sustainable Water Solutions Holding Company (SWS Holding) in June. The deal is expected to add around Dhs6bn to TAQA’s existing asset value and it will create a vertically integrated player adding strong capabilities to the group’s water treatment solutions.

“Demonstrating its commitment to continued growth, the company announced the expansion of its portfolio through its plan to acquire SWS Holding. This transaction will broaden the scope of TAQA’s activity in the regulated utility business by becoming a fully integrated water and wastewater treatment provider,” said Mohamed Hassan Alsuwaidi, chairman of TAQA.

Earlier in June, TAQA, ENGIE and Emirates Water and Electricity Company (EWEC) secured Dhs2.3bn in funding for the low carbon Mirfa 2 reverse osmosis (RO) desalination project in Abu Dhabi.

The desalination plant, which is expected to be operational in Q4 2025, is owned 60 per cent by TAQA while ENGIE has a 40 per cent shareholding. TAQA will also take a 40 per cent stake in the operations and maintenance (O&M) company for the project.

The Mirfa 2 reverse osmosis will produce 120 million imperial gallons per day (MIGD) of water once fully operational, equating to roughly 550,000 cubic metres per day of potable water.

The company also partnered with Uzbekistan to explore opportunities for investment in the Central Asian country’s energy sector. The investment opportunities include new and existing power plants as well as associated power infrastructure with a combined value of more than Dhs11bn.

The Abu Dhabi-listed firm also partnered with ADNOC Group to provide sustainable water supply to the oil company’s onshore operations in a deal that is valued at Dhs8.8bn. The two entities jointly hold a 51 per cent majority stake (25.5 per cent each) in the project while the remaining 49 per cent stake is owned by a consortium comprised of Orascom Construction and Metito.

Read: ADNOC, TAQA invest $2.4bn to supply sustainable water to onshore operations