Abu Dhabi National Energy Co (TAQA) posted its second-successive drop in full-year net profit on Wednesday as charges against its business in the North Sea and lower gas prices in North America affected its earnings.
The state-owned utility said in a bourse filing that net profit for 2012 fell 14 per cent to Dhs640 million ($174.2 million) from Dhs744 million a year ago.
TAQA did not provide quarterly figures but, according to a Reuters calculation, the company recorded a narrower loss in the fourth quarter of Dhs53 million versus a loss of Dhs380 million in 2011.
TAQA attributed the drop in annual profit due to a one-off charge which restricted tax relief on decommissioning spending in the North Sea as well as lower North American gas prices.
The company, which is 75 per cent owned by the Abu Dhabi government, said in November it would cut spending in North America by 30 per cent in 2013 to weather a downturn in commodity prices, including a 40 per cent year-on-year drop in natural gas prices.
No details were provided on how much the North Sea charge affected results, although it is the second year in a row that tax issues have hit profitability. TAQA’s 2011 results said its income tax expense for the United Kingdom was Dhs1.59 billion more that year than in 2010.
In November, TAQA agreed to buy a number of BP’s North Sea assets for over $1.3 billion, a deal interpreted at the time as a sign of improving relations between Britain and the Gulf emirate.
TAQA also cited on Wednesday lower aluminium prices, a lower margin on back-up fuel and higher funding costs for the decline in profit, although a gain on divestments and lower impairment charges in North America partially offset the fall.
Revenue in 2012 increased to Dhs27.5 billion from Dhs24.2 billion in the previous year.
TAQA said last month it sealed a $1.4 billion financing for expansion of the Jorf Lasfar power plant in Morocco.
Shares in TAQA were flat at 0730 GMT against a 0.07 per cent decline in the wider Abu Dhabi market.