TAQA Group reports AED 11.6 billion net profit for Q1 2023

Abu Dhabi National Energy Company PJSC (TAQA), one of the largest listed integrated utilities in the region, on Monday reported a very strong first quarter for the period ending 31 March 2023, with net profit soaring to AED 11.6 billion, an increase of AED 9.6 billion over the prior-year period.

TAQA’s first quarter performance was driven by strong and stable returns from its long-term contracted utilities business and the one-off benefit of the transfer of its 5% stake in ADNOC Gas, the company said. The group revenue was at AED 13.1 billion, 6% higher than the prior-year period, primarily driven by higher pass-through bulk supply tariffs and transmission use of system within the Transmission and Distribution segment, TAQA said.

The net profit was mainly driven by a one-off gain recognised on the acquisition of a 5% shareholding in ADNOC Gas, in part offset by a one-off AED 1.2 billion deferred tax liability associated with the introduction of UAE corporate income tax from 1 January 2024. Net income excluding these one-off items was AED 1.9 billion, overall in line with the prior year, the company said. TAQA’s adjusted EBITDA was AED 5.3 billion, down 5% over the same period last year.

In terms of strategic projects, TAQA and Engie signed a Water Purchase Agreement with EWEC for a 120 MIGD reverse osmosis (RO) plant in Abu Dhabi – the Mirfa 2 RO Plant – with financial close expected to follow shortly. On Taweelah B IWPP, TAQA announced earlier that it has acquired an additional 10% stake in the Taweelah B Independent Power and Water Plant (IWPP) in Abu Dhabi and a 25% stake in the plant’s operations and maintenance (O&M) company.

The group also published its third sustainability report which outlined the company’s 8% reduction in GHG emissions in 2022, putting it firmly on track to achieve its 2030 targets.

In view of the strategic decision to retain the Oil and Gas (O&G) business, TAQA’s shareholders approved an updated dividend policy for 2023 to 2025 based on a combination of fixed and variable dividend, the company said. Under the new structure, fixed dividends will be 3.25 fils/share in 2023, 3.50 fils/share in 2024 and 3.75 fils/share in 2025, paid quarterly. The variable dividend component will be paid annually and be based on a discretionary percentage of annual net profit from the O&G business. 

TAQA also highlighted its long-standing strategic partnership with ADNOC, which continues to be solidified with recent transactions, such as the joint shareholding (along with Mubadala) of Masdar and the US $3.8 billion project to decarbonise ADNOC’s offshore operations.

In recognition of this ongoing relationship, TAQA received from ADNOC a 5% interest of the total issued share capital of ADNOC Gas, with no cash consideration paid for this stake. ADNOC Gas was listed on the Abu Dhabi Securities Exchange during Q1 2023 and represents a significant financial asset for TAQA. Furthermore, TAQA’s net income is set to benefit from dividends from ADNOC Gas. Based on ADNOC Gas’ announced dividend policy, TAQA is expected to receive dividends worth AED 298 million in 2023, rising to AED 611 million by 2024, the company said.