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Following Q1'07, TAQA acquired CMS Generation, providing additional breadth to the company's downstream activities, while the acquisition of Northrock Resources and Pioneer Canada significantly increased TAQA's upstream assets.
The largest company acquisition to date, PrimeWest, which was completed on 16 January 2008, is included in the company's financial results, herewith, for the first time.
The effect of these acquisitions should be considered when making year-on-year comparisons.
Key highlights of the results for Q1 2008:
- Total revenue grew 279% approaching Dhs4.0bn compared with Dhs1.0bn for the same period in 2007:
- Revenue from the electricity and water business grew by 38% to Dhs1.2bn, from Dhs0.9bn for the same period in 2007. This does not include supplemental fuel sales.
- Revenue from oil and gas activities accounted for Dhs1.9bn compared to Dhs76m for the same period of 2007. As at Q1'07, just two months of revenue from the assets acquired from BP Netherlands were included. The increase in Q1'08 was largely due to the acquisition of the TAQA North assets made since Q1'07. High average oil and gas prices experienced during the period have also been a contributing factor.
- Revenues derived from gas storage grew to Dhs216m compared with Dhs72m for the same period of 2007. This includes a full quarter of revenue from TAQA Energy as well as gas storage revenue from East Cantaur in TAQA North.
- EBITDA more than doubled to Dhs2.4bn in Q1'08. When adjusted to remove distorting factors such as supplemental revenue from revenues and interest and investment income from EBITDA the resulting EBITDA margin for Q1'08 is 70% versus 74% for the same period Q1'07.
- Finance costs net of interest income increased from Dhs371m to Dhs836m to fund acquisitions.
- Net profit (after minority interests) for the quarter grew 525% to Dhs398m compared to Dhs64m in the same quarter in 2007. The increase is due to the acquisitions made since Q1'07, as well as the impact of high oil and gas prices experienced in Q1'08.
- Basic earnings-per-share grew 525% to 9.6 fils for the quarter compared to 1.5 fils for the same period of 2007.
- Total assets grew 27% in Q1'08, to Dhs86bn, compared to Dhs68bn as at 31 December 2007.
Upstream and midstream
- Upstream activity generated revenues of Dhs2.1bn (including gas storage), 53% of total revenues and 58% of the total segment net profit.
- Total production was 10.2m barrels of oil equivalent (boe) in Q1'08, split between TAQA North (boe8.1m ) and TAQA Energy and TAQA Bratani (boe2.1m ).
- Total average daily oil and gas production in Q1 2008 was 112.3 thousand boe per day.
- Average net realized price of crude oil sold was $83 per barrel for TAQA North in canada and $101 per barrel in Europe for TAQA Energy and TAQA Bratani. The average price for the total production in Canada and Europe was $87 per barrel.
- Average net realized price for natural gas sold was $7.8 per thousand cubic feet (mfc) for TAQA North and $8.7 per mcf for TAQA Energy and TAQA Bratani. The average price for was $8.0 per mcf.
- Drilling success rate of 98% for TAQA North.
- Results represent significant growth, due to the impact of TAQA's acquisitions in 2007.
Downstream
- Downstream activity generated revenues of Dhs1.9bn in the first quarter, comprising 47% of total revenues, and 42% of the total segment profit.
- TAQA's downstream capability now represents total global generation capacity (gross) of 9,423 Mega Watts. During 2007, total power production ran to 8,243 Giga-Watt hours.
- TAQA's total water desalination in 2007 was 43,175.5 million Imperial gallons, with an installed capacity of 594 million Imperial gallons per day.
- Power and water sales in the UAE accounted for a total of 23% of the total revenue, with non-UAE assets accounting for a further 24% of the total revenue.
- Technical availability of power generation businesses averaged 86% with an average domestic availability of 85% and an international average availability of 91%.
Comment
Peter Barker-Homek, Chief Executive Officer of TAQA, said:
"The results for the first quarter of 2008 tell a very different story to that of Q1'07 due to the acquisitions made during the year. Integration has been a major focus for the quarter, and for the first time we can begin to see the impact of the acquisitions we have made in the last year, including PrimeWest, the company's largest acquisition to date.
"I am proud to report a net profit of Dhs398m for the quarter which has significantly boosted the Earnings Per Share. Whilst the acquisitions made in 2007 together with a back drop of high oil and gas prices have contributed heavily to revenue and profit, we have also witnessed respectable organic growth of our existing portfolio. We will continue to focus on the integration of our acquisitions over the coming quarter and beyond, to ensure efficiency within our operations and develop our positioning as a global energy company".
Corporate activity during the period
During 2007, TAQA made strategic acquisitions that have transformed it into a global energy company comprised of quality energy assets. Today, TAQA operates in nine countries, and employs 2,800 people who come from 38 different nations.
On 16 January 2008, TAQA completed its Cdn $5bn acquisition of PrimeWest Energy Trust. This is TAQA's largest acquisition to date and now affords TAQA a position as one of Canada's top ten energy companies in terms of net proven natural gas reserves and in the top 12 in terms of oil and gas production.
In January 2008 TAQA agreed to a $3.1bn, one-year credit facility with several international lenders and to a $1.3bn, two and a half year credit facility with a syndicate of lenders in Canada.
Posted by Eman Hassan
