Taqa returns to second quarter profit as oil, gas revenue jumps
ABU DHABI (Bloomberg) -- Abu Dhabi National Energy Co., which produces power, crude oil and natural gas from Canada to North Africa, returned to profit in the second quarter, buoyed by a 47% increase in oil and gas revenue.
The state-controlled utility, also known as Taqa, said it plans to sell assets and doesn’t intend to return to the bond market until 2017. The company reported a second-quarter attributable profit of 239 million dirhams ($65 million), rebounding from a loss of 172 million loss a year earlier, it said in a statement to the Abu Dhabi stock market. Revenue from oil and gas jumped to 3.1 billion dirhams from 2.1 billion in the second quarter of 2013, Taqa said.
“We are starting to see the results of our focused strategy bearing fruit,” COO Edward LaFehr said in the statement. “Greater efficiencies and cost control, combined with a conservative view on growth projects and acquisitions, will ensure we can deliver our commitment to reduce debt and improve financial performance.”
Taqa, which suspended oil operations in Iraq this week because of escalating instability near the country’s Kurdish region, said it has available liquidity of $5 billion, including $1.1 billion in cash. Last year it took over oilfield operations in Iraq and oil and gas deposits in the U.K. from BP Plc. The company expects to pay 2016 debt maturities from its own cash flow and unspecified asset sales.
Taqa has a $1 billion bond due in October 2016, according to data compiled by Bloomberg.
The utility started commercial operations at its Bergermeer gas storage facility in the Netherlands in April, while its U.K. operations produced a record average volume of 61,500 boe in the first half, Taqa said in the statement.
Expansion of the Takoradi 2 power station in Ghana is more than 90% complete, and the plant will be operating in the fourth quarter, Taqa said. The company ended talks to invest in two hydroelectric plants in India and the Sulaymaniyah power station in Iraq’s Kurdish region, steps that will improve cash flow and reduce debt leverage, it said.
The shares rose 2.8% to 1.12 dirhams in Abu Dhabi. The stock has dropped 23% this year, compared with a 16% gain in the benchmark ADX General Index.