Taqa experiences significant profit surge in Q1 due to ADNOC Gas stake acquisition

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Abu Dhabi National Energy Company, better known as Taqa, reported an almost sixfold jump in its first-quarter profit, boosted by its purchase of a 5 per cent stake in Adnoc Gas.

Net income attributable to shareholders for the three months to the end of March jumped to Dh11.57 billion ($3.15 billion), from Dh1.97 billion in the same period a year earlier, the company said on Monday in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Taqa’s revenue grew by about 6 per cent in the first quarter to Dh13.14 billion, supported by higher bulk supply tariffs and transmission charges.

“Taqa Group has closed a positive first quarter for 2023 with a significant boost to our net income from our new stake in Adnoc Gas,” said its group chief executive and managing director Jasim Thabet.

“Outside of this, the company has made strong progress in delivering on our growth strategy alongside a steady financial performance.”
In March, Adnoc raised about Dh9.1 billion from the sale of a 5 per cent stake in the gas business, making it the largest listing on the ADX.

Adnoc Gas has access to 95 per cent of the UAE’s natural gas reserves, estimated to be the seventh largest globally. It also supplies more than 60 per cent of the country’s gas needs.

The natural gas company is expected to pay Taqa dividends totalling Dh298 million this year, with the amount increasing to Dh611 million by 2024, the utility said.

Taqa, which announced a new dividend policy in March, said its fixed dividend will amount to 3.25 fils in 2023, 3.50 fils in 2024, and 3.75 fils in 2025 — all paid quarterly, much in the same way as its previous policy.

An additional variable dividend, based on the company’s profit from its oil and gas business, will be paid annually, Taqa said.

Taqa, one of the largest integrated utilities in the Europe, Middle East and Africa region, reported an increase of about 35 per cent in its 2022 net profit after its oil and gas business surged amid rising commodity prices.

Brent, the benchmark for two thirds of the world’s oil, surged to about $140 a barrel following Russia’s invasion of Ukraine last year.

It is currently trading at about $74 a barrel as recession concerns weigh on the crude demand outlook.

Last month, Taqa raised $1.5 billion through dual tranche bond issuances, including $1 billion from its debut green bond, as it continues to invest in expansion and diversify its sources of funding.

In April, the utility launched its green finance framework for the issuance of green bonds, sukuk, loans and other debt instruments to support its net-zero goal.

The company said it planned to use the proceeds of such deals to fund “eligible green projects”, including those in renewable energy, energy efficiency, sustainable water and wastewater management, clean transport and terrestrial and aquatic biodiversity.

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