TAQA reports AED 27.2 billion in revenue in the first half of 2024

Abu Dhabi National Energy Company PJSC (TAQA), a prominent integrated utilities provider in Europe, the Middle East, and Africa, reported revenues of AED 27.2 billion (US $7.41 billion) in H1 2024, reflecting a 2.0% increase compared to the same period last year, buoyed by steady returns from its Transmission & Distribution (T&D) business and the enhanced contribution from Sustainable Water Solutions Holding Company PJSC (SWS Holding).

The addition of SWS Holding also contributed to an increase in adjusted EBITDA and net income. The group’s adjusted EBITDA reached AED 10.9 billion, up by 4.0% from the first half of 2023. Net income for the period was AED 4.4 billion, marking an increase of AED 0.5 billion or 12.3% year-on-year, excluding one-off items. However, including these one-off items, net income saw a significant decrease of AED 9.2 billion.

Meanwhile, capital expenditure surged to AED 3.8 billion, a substantial 91% increase from the previous year, driven primarily by progress in the Mirfa 2 Reverse Osmosis (M2 RO) and Shuweihat 4 Reverse Osmosis (S4 RO) desalination projects, as well as the timing and phasing of project execution within the T&D sector.

Free cash flow generation amounted to AED 4.3 billion, down AED 2.1 billion from the previous year. This decline was primarily due to increased capital expenditure on the M2 RO and S4 RO desalination projects and movements in working capital. Gross debt decreased to AED 58.6 billion from AED 61.7 billion at the end of 2023, largely due to the repayment of AED 3.5 billion in matured corporate bonds and AED 1.5 billion in scheduled loan repayments. This reduction was partially offset by an additional AED 1.5 billion in project debt from the acquisition of SWS Holding and AED 0.6 billion in new project debt to fund the M2 RO and S4 RO projects.

His Excellency Mohamed Hassan Alsuwaidi, Chairman of TAQA, commented, “TAQA's continued growth during the first half of 2024 reflects our unwavering commitment to delivering long-term value for our stakeholders. Our strong financial results, supported by an improved credit rating of AA by Fitch, demonstrate the resilience of our balance sheet. Our focus on executing projects that enhance our market position remains steadfast. Noteworthy is the integration of SWS Holding, which will bolster our transformation into a vertically integrated utility leader with expanded expertise in water treatment. We are committed to sustainable growth that balances shareholder benefits with our stewardship of the environment and communities.”

On the strategic front, TAQA announced several significant developments. In the Transmission and Distribution business, TAQA, Vision Invest, and the GIC Consortium achieved financial closing for the Juranah Independent Strategic Water Reservoir Project in Makkah, Saudi Arabia. This milestone underscores TAQA's commitment to supporting sustainable development in the region and aligns with its strategy to expand its T&D business internationally.

In the generation sector, TAQA signed a Power and Steam Purchase Agreement with SATORP, a joint venture between Saudi Aramco and TotalEnergies, to develop a cogeneration plant for a petrochemical complex in Saudi Arabia. TAQA will hold a 51% stake in the plant, with Jera owning the remaining 49%. The plant is expected to provide up to 475 MW of power and approximately 452 tons per hour of steam using advanced combined cycle gas-fired technology. Additionally, the Taweelah Reverse Osmosis Independent Water Plant commenced full commercial operations in Q2 2024. This plant is one of the world’s largest and most efficient desalination facilities, with a capacity of around 200 million imperial gallons per day.

Masdar also made notable strategic acquisitions. The company signed a definitive agreement with GEK TERNA to acquire a 67% stake in Terna Energy, enhancing its renewable energy portfolio in Greece and the EU. Terna Energy aims to achieve a 6 GW operational capacity by 2030. Furthermore, Masdar announced plans to acquire a 50% stake in Terra-Gen, a North American renewable energy firm, from Energy Capital Partners. Terra-Gen operates 2.4 GW of wind and solar energy and 5.1 GWh of energy storage across the US. These acquisitions, pending regulatory approvals and expected to close by the end of 2024, will significantly bolster Masdar’s goal of reaching 100 GW of global capacity by 2030.

Operationally, TAQA achieved a transmission network availability for power and water of 98.5% in H1 2024, a slight improvement from 98.2% in H1 2023. Generation global commercial availability was 98.1%, marginally lower than 98.7% in the same period last year, due to planned and unplanned outages across the UAE and international fleet. The asset availability for SWS Holding was 96.4%, highlighting the robust performance of the assets integrated into TAQA’s portfolio since early 2024. However, Oil & Gas average production volumes decreased to 104.9 thousand barrels of oil equivalent per day (boepd), a decline of 7.6% compared to the first half of 2023, primarily due to natural production decline and decommissioning activities associated with the Group’s late-life UK assets.

Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director, added, “TAQA’s robust financial and operational performance in the first half of 2024 was driven by sustained growth across our T&D business and bolstered by the addition of SWS Holding. These reliable income sources align with our ambition to be a leading integrated utility provider, delivering low-carbon power and water to the communities we serve and creating value for stakeholders. Our strategic projects, including the cogeneration plant in Saudi Arabia and the Juranah Independent Strategic Water Reservoir Project, are key to our ongoing success and international expansion.”