Abu Dhabi utility and energy giant Taqa booked some serious gains from the ADNOC Gas shareholding. At the same time, it has also made provisions for a Dh1.2 billion deferred tax liability. Image Credit: Supplied

Dubai: The ADNOC Gas IPO and listing sure benefitted Taqa – the Abu Dhabi utility giant – on its Q1-23 profits. There was a one-off gain of 5 per cent from TAQA acquiring 5 per cent in the former.

Based on ADNOC Gas’ announced dividend policy, Taqa will likely receive dividends Dh298 million in 2023 and Dh611 million by 2024.

At the same time, planning for the UAE Corporate Tax is also showing up in the company’s financials. Taqa said there was a one-off Dh1.2 billion deferred tax liability associated with the introduction of the CT.

In all, the net income for the ADX-listed entity was Dh11.6 billion for the first three months – an increase of Dh9.6 billion. If the net income were to exclude these one-offs, it would total Dh1.9 billion, in line with the prior year.

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The Taqa Board of Directors have declared a first interim cash dividend for the year of 0.65 fils per share (around Dh731 million) as part of the new quarterly payout policy. The new dividend policy - for 2023-25 - is based on a combination of fixed and variable dividends and 'offer attractive returns to shareholders and is in line with our evolving business model'.

“Taqa Group has closed a positive first quarter for 2023 with a significant boost to our net income from our new stake in ADNOC Gas," said Jasim Husain Thabet, Taqa’s Group CEO and Managing Director. "Outside of this, the company has made strong progress in delivering on our growth strategy alongside a steady financial performance."

The company is also exploring new streams, lining up an investment in a renewable energy venture in the UK.

There have been investments locally as well.

"We started the year by expanding our stake in Taweelah B IWPP and further strengthened our capabilities by expanding into the plant’s operations and maintenance, a key growth area for our business," said Thabet. "We partnered with Engie to develop the Mirfa 2 RO plant, which will deliver 120 MIGD of desalinated water.

"This plant is another important step in expanding energy-efficient RO (reverse osmosis) technology in our desalination fleet as we promised."

Group revenues in Q1-23 was 6 per cent higher to Dh13.1 billion, from higher pass-through bulk supply tariffs and transmission use of system within the transmission and distribution segment. Capital expenditure was Dh1.1 billion, a sizeable 26 per cent higher.

Debt and cash flow

Total debt was at Dh59.8 billion, down from Dh61.7 billion at the end of last year. The free cash flow generation came to Dh4.3 billion, 31 per cent higher and this was 'despite the higher capital expenditure'.

Fixed and variable dividend

Under the new payout structure, fixed dividends will be 3.25 fils a share in 2023, 3.50 fils/share in 2024 and 3.75 fils/share in 2025, paid quarterly. The variable dividend component will be paid annually and based on a discretionary percentage of annual net profit from the O&G business.