Abu Dhabi National Energy Company (TAQA) has released its financial results for the first nine months ending September 30, 2024. According to a statement, the Group demonstrated a strong financial performance, underpinned by steady returns from its utilities sector and an enhanced portfolio following the integration of TAQA Water Solutions, previously known as Sustainable Water Solutions Holding Company PJSC.
Revenue and earnings growth
In terms of financial highlights, the Group reported revenues of AED41.7 billion ($11.3 billion), reflecting a 6.0 percent increase from the same period last year, primarily driven by contributions from TAQA Water Solutions as well as the Transmission and Distribution sectors.
The EBITDA stood at AED16.9 billion ($4.6 billion), marking an increase of AED1.4 billion ($381.1 million), or 9.0 percent, compared to the previous year, excluding a one-time AED10.8 billion charge related to the acquisition of a 5 percent stake in ADNOC Gas. When this one-off item is included, EBITDA experienced a decline of AED9.4 billion.
Net income reached AED6.3 billion ($1.7 billion), an increase of AED0.7 billion, or 13.2 percent, compared to the prior year when excluding one-off items, which included the aforementioned ADNOC Gas acquisition and a deferred tax charge of AED1.1 billion due to the introduction of corporate tax in the UAE. However, when these one-off items are considered, net income declined by AED8.9 billion.
Capital expenditure was reported at AED6.1 billion, an increase of 85.4 percent compared to the previous year, largely driven by advancements in the Mirfa 2 Reverse Osmosis and Shuweihat 4 Reverse Osmosis desalination projects, the timing of project executions within Transmission and Distribution, and the inclusion of TAQA Water Solutions.
Free cash flow
Free cash flow generation amounted to AED2.9 billion, a decrease of AED7.3 billion from the previous year, primarily due to increased investments in Masdar, capital expenditures across Generation, Transmission and Distribution, and TAQA Water Solutions, along with accelerated decommissioning activities in the Oil and Gas sector. The Group’s gross debt stood at AED60.6 billion, down from AED61.7 billion at the end of 2023. This decrease was mainly attributed to the repayment of AED3.5 billion in matured corporate bonds and scheduled loan repayments totaling AED2.2 billion, although these reductions were somewhat offset by new debts, including a AED2.4 billion drawdown from the Group’s revolving credit facility, AED1.5 billion in project debt from the acquisition of SWS Holding, and AED1.0 billion allocated for the construction of the two desalination projects.
Strategic developments in transmission and distribution
Regarding strategic highlights, TAQA made significant moves in its Transmission and Distribution operations. In September, the company announced the merger of its distribution operations, Abu Dhabi Distribution Company and Al Ain Distribution Company, into a single entity branded as TAQA Distribution. This merger positions TAQA for future growth, establishing a business with the scale to enhance operational excellence and customer service throughout the Emirate of Abu Dhabi. Additionally, TAQA introduced a unified brand identity across its entire portfolio, marking a significant step forward in its growth strategy aimed at delivering integrated power and water services in the UAE and beyond. This rebranding is anticipated to elevate awareness of TAQA’s extensive utility activities, further supporting the company’s growth ambitions and reinforcing its status as a national champion of the UAE.
Advancements in generation sector
In the Generation sector, TAQA announced in August the financial closure of Najim Cogeneration Company Limited, a new facility designed to produce electricity and steam for a petrochemical complex in Jubail, Saudi Arabia. TAQA will hold a 51 percent ownership stake in the plant, with Jera holding the remaining 49 percent. Both companies will oversee the operation and maintenance of the facility, which is set to provide up to 475 MW of power and approximately 452 tons of steam per hour using advanced combined cycle gas technology to SATORP, a joint venture between Saudi Aramco and TotalEnergies.
Strategic acquisitions by Masdar
Moreover, in October, Masdar finalized the acquisition of a 50 percent stake in Terra-Gen Power Holdings II from Energy Capital Partners, enhancing its position as a leading independent renewable energy producer in the U.S. Terra-Gen’s portfolio includes 3.8 GW of wind, solar, and battery storage projects across 30 sites in the U.S., contributing significantly to Masdar’s goal of reaching 100 GW of global capacity by 2030. In September, TAQA also completed the full acquisition of SWS Holding, now TAQA Water Solutions, which is responsible for wastewater collection and treatment as well as producing recycled water in Abu Dhabi. With a regulated asset value of approximately AED17.5 billion, TAQA Water Solutions boasts a network of around 13,000 km of sewer pipelines and a water treatment capacity of approximately 1.3 million cubic meters per day from 43 plants, thereby enhancing TAQA’s capabilities in water management.
Oil and gas sector progress
In the Oil and Gas sector, TAQA completed the sale of its stake in the Atrush oil field in Iraq in August and is advancing its efforts in the UK by focusing on safe and efficient decommissioning in the North Sea. This transition includes halting production at its North Cormorant, Cormorant Alpha, Eider, and Tern platforms in 2024, concluding all hydrocarbon production in the Northern North Sea. In October, TAQA successfully issued bonds totaling $1.75 billion in 7-year and 12-year dual-tranche senior unsecured notes, with the 12-year notes representing TAQA’s second green bond issuance. The net proceeds from these bonds will be allocated to finance and invest in eligible green projects as outlined in the company’s Green Finance Framework.
Operational performance metrics
As for operational highlights, the availability of the transmission network for power and water was recorded at 98.7 percent, slightly up from 98.4 percent in the previous year. The Generation business achieved a global commercial availability rate of 98.0 percent, which is marginally higher than the 97.9 percent reported last year. The asset availability for TAQA Water Solutions was 95.7 percent, reflecting the strong performance of its assets since the beginning of 2024. However, average production volumes in the Oil and Gas sector fell to 102.2 thousand barrels of oil equivalent per day, a reduction of 5.6 percent due to natural production declines and decommissioning activities linked to the cessation of operations at four UK assets.
Read more: Abu Dhabi’s TAQA posts $571.7 million net income in Q1 2024
Commitment to financial stewardship
Jasim Husain Thabet, TAQA’s group chief executive officer and managing director, remarked on the robust financial and operational results for the first nine months of 2024, highlighting the strength of TAQA’s core businesses and its disciplined growth approach.
He noted that the Transmission and Distribution division, along with the successful integration of TAQA Water Solutions, has created reliable revenue streams, solidifying TAQA’s position as a leading provider of low-carbon power and water.
Thabet emphasized that this period also marked a significant milestone for the Group with the merger of its distribution companies and the rebranding of its operating entities in the UAE, reinforcing TAQA’s integrated role across the utilities value chain.
He also highlighted progress on strategic projects, including the Juranah Water Reservoir in Makkah and the cogeneration plant in Jubail, Saudi Arabia, which reflect TAQA’s commitment to regional expansion and sustainable infrastructure.
Through Masdar, the company continues to pursue its global renewable energy goals, with recent acquisitions supporting its target of achieving 100 GW capacity by 2030, he added.
Thabet concluded by underscoring TAQA’s commitment to financial stewardship, marked by the successful issuance of bonds totaling $1.75 billion, including $850 million in green bonds, which demonstrates the company’s dedication to sustainable finance and reflects its financial resilience as it continues to seek growth opportunities that align with its vision and enhance long-term stakeholder value.
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