Abu Dhabi utility giant Taqa to start paying dividends quarterly - first in UAE
It also gives green signal to foreign investors to own shares for the first time
Dubai: Nine-month 2020 net income at the Abu Dhabi utility giant Taqa dropped to Dh1.3 billion, brought about by "significantly lower" share coming from the oil and gas assets. There was also the impact from a Dh1.5 billion post-tax impairment cost of Dh1.5 billion, which was taken in first quarter 2020.
Also, Taqa - otherwise known as Abu Dhabi National Energy Company - confirmed it is introducing a new dividend policy, which will see "increasing" payouts being made, starting with an interim one of 1.5 fils a share. A final dividend of 1 fil a share will be paid after the annual general assembly next year. Dividends for 2021 and 2022 will be paid quarterly.
Taqa, which recently completed a merger with ADPower - will thus become the first UAE listed company to pay dividends on a quarterly basis. The implementation is subject to further regulatory and shareholder approval.
Mohamed Hassan Al Suwaidi, Chairman of Taqa Group, said: “We are pleased to start delivering on the company’s new strategic imperatives, which includes delivery of sustainable shareholder returns. We will propose a progressive dividend policy that will see Taqa return cash to investors on a quarterly basis and commit to growing this by 10 per cent per year over the next two years."
It was on July 1 that its transaction with Abu Dhabi Power Corporation (ADPower) came into full effect.
Raise foreign share
In another significant decision, Taqa's Board of Directors has allowed foreign ownership - and to the full extent of 49 per cent. "Our decision to permit foreign ownership is another step in our strategy to diversify our investor base, improve the stock’s liquidity and support the significant efforts of our country’s leadership to encourage foreign capital inflows and position the UAE among the most attractive economies for foreign direct investment,” the Chairman said.
Softer numbers
Taqa reported group-wide revenues of Dh30.8 billion for first nine months, which were 7 per cent lower from a year ago. This was primarily from "lower commodity prices and production volumes within the oil and gas segment".
The EBITDA (earnings before interest, tax, depreciation and amortisation) was at Dh12 billion, down 17 per cent. All of which resulted in capital expenditure dropping 20 per cent to Dh2.8 billion.
Strong market headwinds have challenged the entire energy industry this year, but as a new, transformed company, Taqa’s financial results demonstrate the company’s ability to deliver on our core mandate – to reliably supply energy and water to those we serve