TAQA, the Abu Dhabi based international energy company, yesterday announced its financial and operating results for the six months ended 30th June 2015, saying that significant cost reductions and strong operational performance had partially mitigated the impact of an approximately 50% fall in oil and gas prices.
"While the current commodity price environment has impacted the whole industry, our results show that we are delivering on our accelerated cost transformation programme," said Edward LaFehr, TAQA's Chief Operating Officer. "This, combined with our drive to improve safety, reliability and operating performance, is helping us offset some of the effects of lower prices on our bottom line."
Primarily driven by lower price realisations, TAQA's revenues declined 29% to Dh9.8 billion, while EBITDA decreased 35% to Dh5.2 billion during the six-month period. TAQA recorded a loss of Dh165 million compared to a profit of Dh513 million in the same period last year when oil prices were significantly higher.
During the first six months of 2015, the company reduced cash costs by Dh758 million, compared to the same period in 2014, already exceeding its 2015 full-year target of Dh550 million.
The company has reduced its oil and gas headcount by 22% since 1st July last year, and by 32% in its Abu Dhabi headquarters, while maintaining its commitment to increasing Emiratisation rates. More than 52% of its senior management positions in Abu Dhabi are now held by UAE nationals, a 100% increase compared to a year ago.
"We are well positioned to achieve our targeted Dh1.5 billion of annual savings by the end of 2016, and now have the organisational structure and momentum to deliver," said LaFehr.
TAQA reduced its capital expenditure by Dh1.05 billion during the first six months and is on track to deliver on its previously announced Dh2.5 billion, or 40%, reduction from last year.
TAQA started full commercial operations at its Gas Storage Bergermeer project in April, providing 4.1 billion cubic meters of gas storage capacity, enough to supply 2.5 million Dutch households for a year. It has completed construction and is now commissioning three additional projects: the Takoradi 2 power plant in Ghana where it is expanding capacity from 220 to 330 megawatts without increasing fuel consumption or emissions, the 100 megawatt Sorang hydro plant in northern India, and the 30 million imperial gallon-per-day reverse osmosis water desalination facility at its Fujairah 2 plant in the UAE.
TAQA continued to strengthen its safety and operational performance, which translated into higher operating efficiencies. The company reduced its recordable injury rate, a measure of safety performance, to 0.33 recordable injuries per 200,000 hours, the best in TAQA's history.
At its power and water plants, it improved technical availability and increased power generation by 15% to 36,935 gigawatt hours, a record for the company's global fleet.
Despite significantly lower capital expenditure and reducing its oil and gas unit operating costs by 19%, oil and gas production only decreased 5% to 150,000 barrels of oil equivalent per day, compared to the same period last year.
On 12th August, the company refinanced US$3.1 billion of existing revolving credit facilities at improved terms, thereby reducing funding costs.
During the period, Moody's and Standard & Poor's reaffirmed TAQA's credit ratings at A3 and A respectively.
Available liquidity stood at Dh13.9 billion at the end of the period, including Dh3.6 billion of cash and cash equivalents.