The UAE’s vision of strengthening its capital markets has become one step closer to reality as Sharjah-based energy company Dana Gas plans to raise its foreign ownership limit to 100 percent.
Listed on the Abu Dhabi market, the firm announced that it had obtained the approval of the regulatory authorities to raise the percentage of foreign ownership from 49 percent to 100 percent of its capital, according to a regulatory filing on the Abu Dhabi Securities Exchange.
The largest private sector natural gas company in the region disclosed that the move aligns well with the UAE’s new Commercial Companies Law that abolished a requirement that UAE nationals own 51 percent of onshore firms.
“Opening our company fully to foreign ownership will support the UAE’s vision of strengthening its dynamic capital markets by attracting greater numbers of international investors and deepening market liquidity,” said Dana Gas Chairman Hamid Jafar in a press statement.
According to Jafar, the company’s growth outlook remained rather sturdy in the Kurdistan region of Iraq, where the firm is seeking to increase production.
It also maintained a strong growth outlook in Egypt, where the firm is working on maximizing the value of its assets by negotiating improved fiscal terms.
However, Dana Gas’ recent earnings report was not favorable. The company generated a net profit of 183 million UAE dirhams ($50 million) in the first quarter of 2023 compared to 198 million UAE dirhams in the year-ago period.
Profitability for the quarter dropped 7 percent compared to a 22 percent decline in the company’s realized prices. However, the impact of lower realized prices on the company’s profitability was partially offset by reduced operating costs by 14 percent.
Revenue was 13 percent lower at 447 million UAE dirhams in the first quarter of 2023 compared to 513 million UAE dirhams in 2022.
The decrease in revenue, and subsequently net profit, was primarily due to a pullback in energy prices from high levels.