Taqa swings to H1 loss on operational issues
Abu Dhabi, July 31, 2013
Abu Dhabi National Energy Company (Taqa) has reported a net loss of Dh66 million ($17.9 million) in the first half of the year as against a profit of Dh981 million for the same period of 2012 on operational issues.
For the second quarter of the year, the company reported a net loss of Dh172 million as against a net profit of Dh447 million in the corresponding period of 2012.
Total revenues for the first half (H1) of 2013 were Dh11.3 billion, 4 per cent lower year-on-year, compared with total revenues of Dh11.8 billion in H1 2012.
The decline in revenues was principally due to the impact of the shut-in of production at Cormorant Alpha in the North Sea, Taqa said in a statement.
Cost of sales, excluding construction expenses, were Dh7.4 billion in H1 2013, a decrease of 4 per cent over the prior year period. Overall, higher maintenance costs, particularly in the UK North Sea, were offset by positive stock movements and lower gas trading expenses within the UK and Netherlands respectively.
A series of one-off incidents affected both the Oil & Gas and Power & Water divisions in the first half, the statement said.
These were resolved before the end of the period and the outlook for the rest of the year is positive. The comparison with first half results for last year is distorted by disposals of assets in North America and the sale of shares in Tesla Motors in 2012.
Taqa has emerged from the first six months of its financial year with strong operating cash flow of Dh4.3 billion and a liquidity position of Dh19.5 billion that provides us with ample capacity to cover upcoming maturities and finance our growth plans.
In the UK North Sea, limited production has already resumed at the Cormorant Alpha platform and full production is expected in the third quarter, after an internal leak closed it in January. In Morocco, Taqa took advantage of an unexpected outage at its largest international power plant at Jorf Lasfar to bring forward maintenance that was previously scheduled for 2014.
Carl Sheldon, chief executive officer of Taqa, said: “We have worked hard to overcome a number of operational challenges that affected our performance in the first half of the year, while making great progress against project milestones. We are focused on operational excellence and look forward to ending the year with a positive financial outcome.”
Stephen Kersley, chief financial officer, said: “The second quarter is anticipated to be the low point of the year, with a positive outcome forecast for the 12-month period. We have over Dh 19.5 billion of available liquidity, more than sufficient to cover upcoming maturities and finance our growth plans.”
Power & Water revenues, excluding supplemental fuel and construction revenues, were flat at Dh3.9 billion.
Total oil & gas revenues (including gas storage and other income) declined by 18 per cent to Dh4.8 billion for H1 2013. Lower production in the UK North Sea and softer pricing in Europe for oil, were offset by higher production and a continuing increase in natural gas prices in North America.
Operating expenses were flat year on year at Dh2.1 billion, as higher operating expenses in the North Sea were offset by positive stock movements and lower gas trading expenses.
Financing costs were consistent year on year at Dh2.5 billion, as higher interest expenses associated with the bond issuance in December 2012 were offset by capitalisation of interest.
Overall Gross Profit was Dh3.2 billion in H1 2013, compared to Dh4.1 billion for the prior year. The decline was primarily driven by the operational challenges during the period, principally in the oil & gas division. – TradeArabia News Service