TAQA Group reports a 13% increase in its net income for the first nine months, reaching $1.7 billion, thanks to strong performance in its utilities business
The UAE utility company, Abu Dhabi National Energy Company (TAQA Group), announced on Thursday that its net income for the first nine months of the year increased by 13.2% compared to last year, reaching $1.7 billion (AED 6.3 billion). This growth was driven by steady profits from its utilities business and the addition of TAQA Water Solutions.
Nine-month performance
TAQA Group announced that its net income for the first nine months of this year does not include about $2.9 billion (AED 10.8 billion) from buying a 5% stake in ADNOC Gas or $299.5 million (AED 1.1 billion) in deferred tax due to the new UAE corporate tax. When these one-time items are included, net income dropped by $2.4 billion (AED 8.9 billion), according to a filing with the Abu Dhabi Securities Exchange (ADX).
The company’s total revenue for the period increased by 6% compared to last year, reaching $11.4 billion (AED 41.7 billion). This rise was mainly driven by contributions from Water Solutions and TAQA’s Transmission & Distribution (T&D) business.
TAQA’s earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 9% year-on-year to $4.6 billion (AED 16.9 billion), excluding the ADNOC Gas stake purchase. But if this one-off item is included, EBITDA fell by $2.6 billion (AED 9.4 billion).
The company spent $1.7 billion (AED 6.1 billion) on capital projects, an increase of 85.4% compared to last year. This jump was mainly due to progress on the Mirfa 2 and Shuweihat 4 desalination projects, the timing of T&D projects, and the inclusion of TAQA Water Solutions.
In October, TAQA raised $1.75 billion by issuing senior unsecured bonds with two parts: one for seven years and the other for 12 years. The 12-year bond, worth $850 million, was TAQA’s second green bond issuance. The proceeds will be used to fund eligible green projects as per the company’s Green Finance Framework.
Debt Repayment
TAQA Group’s total debt was $16.5 billion (AED 60.6 billion), which is a slight decrease from $16.8 billion (AED 61.7 billion) at the end of 2023. This was after the company paid off $952.9 million (AED 3.5 billion) in bonds that had matured and $598.9 million (AED 2.2 billion) in scheduled loan repayments, according to their earnings report.
However, the decrease was partly offset by new debt. This included $653.4 million (AED 2.4 billion) borrowed from the group’s revolving credit, $408.4 million (AED 1.5 billion) for debt related to the SWS Holding acquisition, and $272.3 million (AED 1 billion) for building the M2 RO and S4 RO desalination plants.
The group earned free cash flow of $789.6 million (AED 2.9 billion), which is a $1.9 billion (AED 7.3 billion) decrease compared to the previous year. This drop was due to higher investments in Masdar, spending on capital projects in Generation, T&D, and Water Solutions, and faster decommissioning of Oil & Gas operations.
