Abu Dhabi's Taqa posts 35% rise in 2022 profit on booming oil and gas business

Energy company's revenue rose more than 10% annually

Taqa's average realised oil price rose to $87.79 a barrel in 2022, from $64.23 a barrel in 2021. Victor Besa / The National

Abu Dhabi National Energy Company, better known as Taqa, has reported an increase of about 35 per cent in its 2022 net profit after its oil and gas business surged amid rising commodity prices.

Net profit attributable to equity holders for the 12 months ended December rose to Dh8.03 billion ($2.19 billion), from Dh5.96 billion in 2021, Taqa said on Tuesday in a regulatory filing to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue grew by more than 10 per cent annually to about Dh50 billion, supported by its oil and gas portfolio business, whose net income more than doubled to Dh4.7 billion last year.

The company's oil and gas unit generated net income of Dh4.7 billion in 2022, compared to Dh2.2 billion in 2021. The improvement of Dh2.5 billion "was largely due to the improved commodity price environment", the company said.

The group’s average realised oil price rose to $87.79 a barrel in 2022, from $64.23 a barrel in 2021.

Average production increased to 123.8 million barrels of oil equivalent per day in 2022.

“Taqa's record results in 2022 are a continuation of a positive trajectory that is anchored in compelling market opportunities, investment grade credit ratings and higher ESG [environment, social and governance] ratings from global agencies,” said chairman Mohamed Alsuwaidi.

“We continued to make steadfast contributions to the UAE’s decarbonisation goals, accelerating the energy transition and driving sustainable growth.”

Taqa's board has proposed a final cash dividend of 3.3 fils a share, or Dh3.71 billion in total.

It will be the fourth and final dividend payment planned for 2022, bringing the company's total dividend for the year to 5.1 fils a share, or about Dh5.74 billion.

Energy companies are aligning their strategies with sustainable development goals, as the world transitions to renewable resources.

Investment in low-carbon projects is projected to increase by $60 billion this year, 10 per cent higher than 2022, apart from a “significant” rise in funding for hydrogen and carbon capture, according to Norway-based consultancy Rystad Energy.

Meanwhile, about $131 trillion in investment is needed by 2050 to achieve a low-carbon energy transition that will limit global temperature rises to manageable levels, according to the International Renewable Energy Agency.

Taqa has boosted its portfolio by ramping up investments in renewable energy.

In December, Taqa, Mubadala Investment Company and Adnoc completed a deal to become shareholders in Abu Dhabi's flagship clean energy company Masdar.

The move will help Taqa reach its 2030 target of having more than 30 per cent of its generation portfolio come from renewables, Mr Alsuwaidi said.

Other highlights for the company in 2022 include its foray a new market in Uzbekistan, reaching a financial close for a key decarbonisation project for Adnoc's offshore plants and plans to acquire Emirates Global Aluminium's (EGA) power assets and connect the company to the Abu Dhabi grid.

“Both the Adnoc and EGA projects are examples of our role in supporting [the] decarbonisation of hard-to-abate industries, underscoring why we joined the Irena Decarbonisation Alliance during the year and reaffirming our commitment to our ESG strategy,” said Jasim Thabet, group chief executive and managing director of Taqa.

Taqa's transmission and distribution unit contributed a net income of Dh4.2 billion, which was down 4.5 per cent from a year earlier.

However, revenue rose by about 0.8 per cent to Dh26.1 billion, mainly due to higher pass-through bulk supply tariffs.

The company's generation business reported a net income of Dh500 million, down by about 29 per cent annually, but revenue grew more than 12 per cent to Dh13.8 billion on higher pass-through coal fuel revenue in Morocco.

“Taqa remains firm in its commitment to its growth and sustainability journey, while delivering value for its shareholders and stakeholders alike, and I am optimistic about the path for the business in 2023,” Mr Thabet said.

Taqa is one of the largest integrated utilities in the Europe, Middle East and Africa region, with operations across 11 countries.

In the UAE, it supplies more than 90 per cent of Abu Dhabi’s power and water needs.

It has significant investments in water desalination and power generation, transmission and distribution assets, as well as upstream and midstream oil and gas operations.