A Taqa offshore oil platform in Europe. The Abu Dhabi energy major is taking a major write-down on its oil-specific assets. Image Credit: Gulf News Archive

Dubai: Abu Dhabi National Energy Co. – or Taqa – saw group revenues decline 9 per cent to Dh4 billion for the first three months of 2020, brought on by a 21 per cent in the price of oil and gas sold by it.

The group has now “reduced” its 2020 and 2021 oil price projections, which in turn has led to a write-down of “certain oil-specific assets with a post-tax bottom-line impact of Dh1.5 billion”, the energy major said in a statement.

The loss attributable for the first three months was Dh1.7 billion, driven by the impairment charges.

“The advent of COVID-19 has weakened demand across multiple sectors globally, impacting our results for the first quarter, as for many others with exposure to the oil and gas sector,” said Saeed Al Dhaheri, CEO, in a statement issued to ADX (Abu Dhabi Securities Exchange).

The EBITDA (earnings before interest, taxes, depreciation and amortization) was down 18 per cent to Dh1.9 billion, partly a result of higher operating expenses in the oil and gas operations.

For the months ahead, Taqa expects to see benefits from “stable revenue streams”. The transfer of a majority of the utility generation, transmission and distribution assets of Abu Dhabi Power Corp. (ADPower) to Taqa was approved in April. The process will be completed in the third quarter.

A regional powerhouse

Once this gets done. Taqa will become a Top 10 “integrated” utilities provider within Europe, Middle East and Africa based on assets.

“Taqa will generate recurring, stable income with more than 85 per cent of its revenues and EBITDA coming from regulated and long-term contracted businesses,” the statement added. Plus, of course, there are the oil and gas assets.

As of end March, Taqa had accumulated losses of Dh3.36 billion.

Once the transaction with ADPower is effected, the entity will have total assets of around Dh120 billion (as of end 2018 numbers. “This would significantly improve the company’s ability to address its accumulated loss position,” the statement on ADX added.

Strong buffer
Taqa’s liquidity at the end of March was at Dh11.9 billion, which included cash and cash equivalents of Dh2.6 billion and Dh9.3 billion in undrawn credit facilities.