The UAE-based oil and gas company TAQA reported today it had returned to profit in the third quarter after posting a loss in the same period last year. The positive figures were down to strong operational performances across its main divisions, following the successful resolution of a series of issues that had affected its UK Oil and Gas business and its Power and Water division.
Total revenues for 9M 2013 were AED 18.7 billion, compared with AED 20.6 billion in 9M 2012. If construction and fuel revenues are excluded, underlying revenues were flat at AED 14.9 billion.
Total revenue in Q3 2013 was almost AED 6.1 billion compared to AED 4.5 billion in the second quarter of 2013, excluding fuel and construction revenues, reflecting a 36% increase in underlying revenues, as key operations returned to full production. The company’s 3Q net profit was AED 146 million, compared a net loss of AED 288 million recorded in the same period of 2012.
The company demonstrated resilient cash generation of AED 8.2 billion, and maintained its robust financing position, with AED 4.0 billion in cash and cash equivalents.
Total year to date net income was AED 80 million, compared to AED 693 million for the first nine months of 2012.
The weaker year to date profit reflects reduced revenue due to the operational issues that have now been successfully resolved. In addition, the proceeds of a number of disposals in 2012, principally consisting of Tesla stock and excess North American acreage, complicate any direct comparison between the periods.
The company highlighted the successful completion of the integration of Harding, Morrone and Maclure fields in UK North Sea. In addition, Cormorant Alpha returned to production on 30 June, with full production restored on 24 August. Overall, UK production increased to 57.8 mboe/day in the third quarter, up 39% from the same period last year.
There was strong technical availability within the power business, following the successful resolution of technical problems at the Jorf Lasfar power plant in Morocco.
The refinancing for the Shuweihat 2 power and desalination plant was successfully completed, raising AED 3.0 billion of non-recourse project bonds.
At the end of the period, TAQA had four major projects underway. They are the expansion of the Jorf Lasfar power plant, due to be completed next year; the Takoradi plant in Ghana, due in 2015; the completion of the Bergermeer Gas Storage complex in the Netherlands and the Atrush oil and gas field in the Kurdistan region of Iraq. TAQA confirmed all four projects were on schedule and within budget.
Carl Sheldon, Chief Executive Officer, said:
“I am proud of the strong operational performance across the company as we recovered from the challenges faced in the first half of the year. In the UK, seamless integration of the assets we acquired in the Central North Sea, combined with the restoration of production at Cormorant Alpha, led to record levels of production in September. In October, the first of the two new units at Jorf Lasfar in Morocco was synchronised with the national grid, a major milestone in the full commissioning of both units by early 2014.”
Stephen Kersley, Chief Financial Officer, said:
“I am pleased that we have returned to profitability in the third quarter, reflecting our strong operational performance. However, we operate in tough economic conditions, particularly in the North American natural gas market. We must remain focused on executing our capital program efficiently and continue to review our operating and overhead costs globally.”
Press Release, November 06, 2013