Will write-down certain oil-specific assets as a consequence
Dubai: Abu Dhabi National Energy Co. – or Taqa – saw group revenues decline 9 per cent to Dh4 billion for the first three months of 2020, brought on by a 21 per cent in the price of oil and gas sold by it.
The group has now “reduced” its 2020 and 2021 oil price projections, which in turn has led to a write-down of “certain oil-specific assets with a post-tax bottom-line impact of Dh1.5 billion”, the energy major said in a statement.
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“The advent of COVID-19 has weakened demand across multiple sectors globally, impacting our results for the first quarter, as for many others with exposure to the oil and gas sector,” said Saeed Al Dhaheri, CEO, in a statement issued to ADX (Abu Dhabi Securities Exchange).
For the months ahead, Taqa expects to see benefits from “stable revenue streams”. The transfer of a majority of the utility generation, transmission and distribution assets of Abu Dhabi Power Corp. (ADPower) to Taqa was approved in April. The process will be completed in the third quarter.
A regional powerhouse
Once this gets done. Taqa will become a Top 10 “integrated” utilities provider within Europe, Middle East and Africa based on assets.
“Taqa will generate recurring, stable income with more than 85 per cent of its revenues and EBITDA coming from regulated and long-term contracted businesses,” the statement added. Plus, of course, there are the oil and gas assets.
As of end March, Taqa had accumulated losses of Dh3.36 billion.
Once the transaction with ADPower is effected, the entity will have total assets of around Dh120 billion (as of end 2018 numbers. “This would significantly improve the company’s ability to address its accumulated loss position,” the statement on ADX added.
