TAQA Group Reports AED 6.3 Billion Net Income for the First Nine Months of 2024

Abu Dhabi National Energy Company PJSC, one of the largest listed integrated utilities companies in Europe, the Middle East, and Africa, today announced its financial results for the first nine months ending 30 September 2024. The Group achieved solid financial performance, bolstered by consistent returns from its utilities business and a strengthened portfolio following the integration of TAQA Water Solutions (formerly Sustainable Water Solutions Holding Company PJSC, or SWS Holding).

Financial Highlights:

• Group revenues were AED 41.7 billion, 6.0% higher than the prior year period, mainly due to the contribution from TAQA Water Solutions and Transmission & Distribution.
• EBITDA was AED 16.9 billion, an increase of AED 1.4 billion (9.0%) compared to the prior year period, excluding the AED 10.8 billion related to the acquisition of a 5% stake in ADNOC Gas. Including this one-off item, EBITDA saw a decrease of AED 9.4 billion.
• Net income was AED 6.3 billion, up AED 0.7 billion (13.2%) compared to the prior year, excluding one-off items: AED 10.8 billion related to the acquisition of a 5% stake in ADNOC Gas and an AED 1.1 billion deferred tax charge due to the UAE corporate tax introduction. Including these one-off items, net income saw a decrease of AED 8.9 billion.
• Capital expenditure was AED 6.1 billion, 85.4% higher than prior year driven mainly by construction progress in the Mirfa 2 Reverse Osmosis (M2 RO) and Shuweihat 4 Reverse Osmosis (S4 RO) desalination projects, timing and phasing of project execution within T&D and the inclusion of TAQA Water Solutions.
• Free cash flow generation amounted to AED 2.9 billion, AED 7.3 billion lower than the previous year, primarily reflecting increased investments to Masdar, capital investment across Generation, Transmission & Distribution and TAQA Water Solutions and the acceleration of decommissioning activities within O&G.
• Gross debt was AED 60.6 billion, down from AED 61.7 billion at the end of 2023, primarily due to the repayment of AED 3.5 billion of matured corporate bonds and scheduled loan repayments of AED 2.2 billion. However, these reductions were partially offset by new debt, including AED 2.4 billion drawdown from the Group’s revolving credit facility, AED 1.5 billion in project debt from the acquisition of SWS Holding, and AED 1.0 billion to fund the construction of the M2 RO and S4 RO desalination projects.

Recent Strategic Highlights:

• In our Transmission and Distribution business:
  • In September, TAQA announced the merger of its distribution businesses Abu Dhabi Distribution Company (ADDC) and Al Ain Distribution Company (AADC) under a single new brand – TAQA Distribution – to serve customers throughout the Emirate of Abu Dhabi. The merger sets TAQA up for the future, creating a business with the scale and capability to unlock even greater opportunities for operational excellence and growth, enhancing customer experience and strengthening internal capabilities.
• TAQA rebrand:
  • TAQA launched a unified brand identity across its portfolio. The move is a milestone in the growth of TAQA and underpins the company’s strategy to grow through delivering integrated power and water services in the UAE and beyond. The new brand structure is expected to significantly increase awareness and understanding of the scale and breadth of TAQA’s utility activity which will support the next phase of the company’s growth ambitions and strengthen its position as a UAE national champion.
• In our Generation business:
  • In August, TAQA’s Generation business announced the financial closing of Najim Cogeneration Company Limited, a new industrial steam and electricity cogeneration plant that will produce electricity and steam for a petrochemical complex located in Jubail in the Eastern Province of the Kingdom of Saudi Arabia. TAQA will own 51% of the plant, with Jera owning the remaining 49%. TAQA and Jera will also handle the operation and maintenance of the plant. The plant will supply up to 475 MW of power and approximately 452 tons per hour of steam using advanced combined cycle gas-fired technology to SATORP, a joint venture company owned by Saudi Arabian Oil Company (“Saudi Aramco”) and TotalEnergies.
• Masdar’s strategic acquisition in North America:
  • In October, Masdar completed the acquisition of a 50% stake in Terra-Gen Power Holdings II, one of the largest independent renewable energy producers in the US from Energy Capital Partners. Terra-Gen’s gross operating portfolio currently comprises 3.8GW of wind, solar and battery storage projects, including 5.1GWh of energy storage facilities across 30 renewable energy sites throughout the US.
  • This acquisition will significantly contribute to Masdar’s goal of reaching 100GW of global capacity by 2030.
• Building capabilities in the water sector:
  • In September, TAQA completed the 100% acquisition of SWS Holding, now called TAQA Water Solutions, the sole entity responsible for wastewater collection and treatment as well as production of recycled water in the Emirate of Abu Dhabi. TAQA Water Solutions (with regulated asset value of around AED 17.5 billion) has a growing network of approximately 13,000 km of sewer pipelines and a water treatment capacity of approximately 1.3 million cubic metres a day from 43 plants. The acquisition expands TAQA’s capabilities in managing water and complements the existing portfolio, adding significant value to the company’s asset base.
• Oil & Gas business:
  • In August, TAQA completed the sale of its stake in the Atrush oil field in the Kurdish Region of Iraq.
  • TAQA is also making progress in the UK, transitioning its focus towards safe and efficient decommissioning in the North Sea, with the cessation of production at its North Cormorant, Cormorant Alpha, Eider and Tern platforms in 2024. This marked the end of all hydrocarbon production in the Northern North-Sea.
• Bond issuances:
  • In October, TAQA announced the successful pricing of an aggregate USD 1.75 billion in 7-year and 12-year dual-tranche senior unsecured notes. The 12-year notes, sized at USD 850 million, represent TAQA’s second green bond issuance, the net proceeds of which will be used to finance, refinance and invest in relevant eligible green projects, as outlined in the company’s Green Finance Framework.
• ESG ratings uplift:
  • Recently, MSCI upgraded TAQA’s ESG Rating to ‘A’, up from ‘BBB’.

Operational Highlights:

• Transmission network availability for power and water of 98.7%, compared to 98.4%, marginally higher versus the comparative period last year.
• Generation global commercial availability of 98.0%, compared to 97.9%, marginally higher versus the comparative period last year.
• TAQA Water Solutions asset availability of 95.7%, underscoring the robust performance of the assets accounted for by TAQA since the beginning of 2024.
• Oil & Gas average production volumes decreased to 102.2 thousand barrels of oil equivalent per day (mboepd), a decrease of 5.6% compared to the comparative period. This decrease is mainly due to the natural decline in production and decommissioning activity, primarily as a result of the cessation of production of four UK assets as we transition our focus into safe and efficient decommissioning.

Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director, commented: “The strength of TAQA’s core businesses, combined with its disciplined approach and commitment to growth, is reflected in our robust financial and operational performance over the first nine months of 2024. Our Transmission & Distribution business, combined with the successful integration of TAQA Water Solutions, has delivered reliable revenue streams, reinforcing our role as a leading provider of low-carbon power and water.

Beyond a strong performance, this period marked a milestone for the Group with the announcement of the merger of our customer facing distribution companies, along with rebranding of our wholly owned operating entities in UAE, underscoring TAQA’s integrated position across the utilities value chain and enhancing our brand’s resonance and customer service in the communities we serve.

We also achieved progress on several strategic initiatives, such as the Juranah Water Reservoir project in Makkah and the industrial steam and electricity cogeneration plant in Jubail, Saudi Arabia, which demonstrate our commitment to regional expansion and sustainable infrastructure. Through Masdar, we continue to advance toward global renewable goals, with strategic acquisitions in North America and Europe further supporting Masdar’s target of reaching 100 GW capacity by 2030.

Aligned with our commitment to strong financial stewardship, TAQA successfully issued bonds worth USD 1.75 billion, USD 850 million of which in green bonds, underscoring our dedication to sustainable finance. Our improved credit rating of AA from Fitch continues to reflect our financial resilience, and as we look forward, we remain focused on capturing growth opportunities that align with our vision and enhance long-term value for all stakeholders.”