According to the company’s website press release on February 14, 2023, Abu Dhabi National Energy Company PJSC (TAQA), one of the largest listed integrated utilities in the region, reported positive financial results for the year ended 31 December 2022. TAQA delivered a very strong performance during the year which was underpinned by the execution of its growth strategy, its contracted utilities business and an uplift in commodities prices.
Financial highlights for full year 2022:
- Group revenues of AED 50.0 billion, 10.3% higher than the prior-year period, primarily due to higher commodity prices within the Oil & Gas segment.
- Adjusted EBITDA was AED 20.8 billion, up 6.7%.
- Net income (TAQA-share) was AED 8.0 billion, an increase of AED 2.0 billion, with greater contribution from the Oil & Gas segment and lower depreciation expense supporting bottom-line growth.
- Capital expenditure was AED 3.8 billion, 20.1% lower than prior year.
- TAQA also made significant investments of AED 4.5 billion in 2022 (2021: nil), relating to the acquisition of Masdar and the project to power and decarbonize ADNOC’s offshore production operations.
- Free cash flow generation remained strong for the year at AED 13.8 billion, albeit 22.3% lower compared to the previous year, mainly due to payment for TAQA’s investment in Masdar.
- Gross debt was AED 61.7 billion, down from AED 65.0 billion at the end of 2021, further improving the Group’s credit metrics.
Strategic highlights for 2022:
- Completion of the landmark Masdar transaction: TAQA now owns a 43% share in Masdar’s renewables business and a 24% share in its green hydrogen business. Masdar will drive the Group’s investments in clean energy.
- 2030 ESG Strategy announced, outlining clear milestones enroute to the 2050 Net Zero target: TAQA has committed to a 25% reduction of scope 1 and 2 emissions by 2030 across the Group, including a 33% reduction of UAE portfolio emissions. Additionally, TAQA aims to reduce water distribution losses by 25% by 2030, while the participation of women in management is set to rise to 30% over the same period.
- Material uplift in ESG ratings: The efforts being made by the Group on the ESG front, including improved communication with all stakeholders, have been recognised by the major global ESG rating agencies. MSCI, Sustainalytics and CSRHub have significantly improved TAQA’s ratings.
- Successful financial closing of a decarbonisation project with ADNOC, the first-of-its-kind in the region. The USD 3.8 billion strategic project will significantly decarbonise ADNOC’s offshore production operations through a high-voltage direct current sub-sea transmission network that will connect ADNOC’s offshore operations to Abu Dhabi’s onshore grid.
- Entering Uzbekistan through privatization program: TAQA signed agreements to acquire a 40% stake in the Talimarjan power complex. This entails investment in the privatization of gas-fired projects and the assumption of related operations & maintenance (O&M) activities.
- Announced intention to acquire a 50% stake in EGA’s 6.4 GW power generation assets and connect EGA facilities to the Abu Dhabi grid, enabling access to clean energy sources.
- Successfully priced AED 2.6 billion green senior secured bonds to refinance debt facilities for the Noor Abu Dhabi project, one of the world’s largest single-site solar plants. This was TAQA’s first foray into green finance.
- New dividend policy proposed for 2023-2025: In view of the strategic decision taken by TAQA’s Board to retain the O&G business, it has proposed an updated dividend policy for 2023 to 2025 based on a combination of fixed and variable dividend. Under the new structure, the Company expects fixed dividends to be 3.25 fils/share in 2023, 3.50 fils/share in 2024 and 3.75 fils/share in 2025, paid quarterly. The variable dividend component will be paid annually and be based on a discretionary percentage of annual net profit from the O&G business.
Operational highlights:
- Transmission network availability for power and water of 98.6%,compared to 98.4%, marginally higher versus the prior-year period.
- Generation global commercial availability of 98.1%, compared to 97.3% in the prior year, with the UAE plants in particular contributing to the slight increase.
- Oil & Gas average production volumes increased to 123.8 thousand barrels of oil equivalent per day (boepd), an increase of 1.1% on 2021.
H.E. Mohamed Hassan Alsuwaidi, TAQA’s Chairman, commented: “TAQA’s record results in 2022 are a continuation of a positive trajectory that is anchored in compelling market opportunities, investment grade credit ratings and higher ESG ratings from global agencies. We continued to make steadfast contributions to the UAE’s decarbonisation goals, accelerating the energy transition and driving sustainable growth. As part of these efforts, the company acquired a controlling stake in national clean energy champion Masdar, which is set to allow TAQA to reach its 2030 objective of having more than 30% of its generation portfolio come from renewables ahead of target. With an exceptional track record, a market-leading position and a bright outlook, TAQA is ideally positioned to deliver on its strategic goals for 2030 and beyond.”
Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director, commented: “In 2022, TAQA maintained its strategic focus, executing on its growth and ESG ambitions, demonstrating tangible progress on the targets we have set and showing our stakeholders that we deliver on our promises. Highlights include progressing with our growth strategy with the acquisition of Masdar, which is set to become one of the world’s largest clean energy companies. We took steps to enter a new market in Uzbekistan, we reached financial close for a key decarbonisation project for ADNOC’s offshore production facilities, and we announced our intention to acquire EGA’s power assets and connect the company to the Abu Dhabi grid. Both the ADNOC and EGA projects are examples of our role in supporting decarbonisation of hard to abate industries, underscoring why we joined the IRENA Decarbonization Alliance during the year and reaffirming our commitment to our ESG Strategy.
This focus is demonstrated in our strong set of financial results which allow us to continue to invest in delivering against our ambitions without compromising on strong returns. TAQA remains firm in its commitment to its growth and sustainability journey, whilst delivering value for its shareholders and stakeholders alike and I am optimistic about the path for the business in 2023.”
Upon approval of the financial results, TAQA’s Board of Directors also proposed a final cash dividend of 3.3 fils/share (AED 3,713 million). This will be the fourth and final dividend payment planned for the financial year of 2022 bringing total dividends for the year to 5.1 fils/share (AED 5,738 million).
