TAQA announces Q3 2007 financial results

During the third quarter, total revenue reached Dhs2.45bn compared with Dhs874.9m for the same period in 2006, an increase of 181%. Revenue from the electricity and water business grew by 35% to Dhs1.2bn, from Dhs874m for the same period in 2006.

This does not include supplemental fuel sales to allow for a like-for-like comparison. Revenue from oil and gas accounted for Dhs334m (there is no comparable like-for-like figure in 2006). This figure includes gas storage revenue.

Peter Barker-Homek, Chief Executive Officer of TAQA, said:

"Our business is changing significantly and our investment view is now a global one. A year ago, TAQA's revenues were primarily derived from water and power generation in the UAE. Today, we are also reporting substantial growth in oil and gas revenues further to our expansion into the Netherlands and Canada. This financial and operational diversification across the value chain is key to our five year strategy of becoming a major global energy company."

He added, "TAQA does have an appetite for acquisitions and scale is important to us, however, as today's results demonstrate, this is being balanced with strong organic growth from our existing portfolio."

EBITDA of Dhs1.3bn for Q307, giving an EBITDA margin of 52% versus EBITDA of Dhs585m and a margin of 66% in the same period in 2006. EBITDA margin for 2007 excluding supplementary fuel would be 85%. Finance costs increased from Dhs296m to Dhs644m, to fund acquisitions. Net profit grew 172% to Dhs215.7m compared to Dhs79.4m in the same quarter in 2006. Basic earnings-per-share rose 50% to Dhs0.03 for the quarter.

For the first nine months of 2007, revenue of Dhs5.3bn, an increase of 123% from Dhs2.4bn in the same period in 2006. Revenue from the electricity and water business grew by 45% to Dhs3.4bn, from Dhs2.4bn for the same period in 2006. This does not include supplemental fuel sales to allow for a like-for-like comparison. Revenue from the oil and gas businesses accounted for Dhs567.6m (there is no comparable like-for-like figure in 2006). This figure includes gas storage revenue.

EBITDA of Dhs3.42bn, giving an EBITDA margin of 65%, versus EBITDA of Dhs1.9bn and a margin of 80% in the same period in 2006. EBITDA margin for 2007 excluding supplementary fuel would be 85%. Finance costs increased from Dhs879m to Dhs1.8bn, to fund acquisitions. Net profit grew 56% to Dhs587m compared to Dhs375m in the same period for 2006. Basic earnings-per-share grew to Dhs0.09 for the period vs Dhs0.06 in the same period in 2006. Total assets grew 86.2% to Dhs60.9 billion compared to Dhs32.7bn in the same period for 2006.

Barker-Homek continued, "The operational and financial growth we have experienced during the third quarter of 2007, underpinned by assets with strong cash flows, is also testament to the strength of the management team we now have in place. Acquisitions are being integrated successfully, with no real business disruption."

Acquisitions during the period

The Canadian market has been the key focus of the Company's expansion plans for the quarter. The focus has been on long-life, stable assets in the form of Canada's oil and gas sector. Once closed, these transactions will make TAQA one of the top 14 oil and gas producers in Canada:

-In August, TAQA acquired 100 per cent of Northrock Resources Ltd., a Canadian oil and gas exploration company with operations in the Western Canadian Sedimentary Basin for a total purchase price of $2bn. This has now been renamed TAQA North.

-In August, TAQA announced a $540m share purchase agreement with Pioneer Canada. Pioneer Canada is an oil and gas exploration and production company with operations in the Western Canadian Sedimentary Basin. The transaction is subject to regulatory and third party consents and is expected to be completed in the fourth quarter of 2007.

-In September, TAQA North announced the acquisition of PrimeWest Energy Trust, a Calgary-based conventional oil and gas royalty trust. The total value of the transaction was approximately Cdn.$5bn. The transaction is subject to regulatory and shareholder consents and is expected to be completed in the fourth quarter of 2007 or first quarter of 2008.