Abu Dhabi National Energy Company (TAQA) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw resilient financial performance amid global macroeconomic uncertainty, with revenue rising to AED 14,202 million, up 3.8% year-on-year, mainly from transmission, distribution, and water solutions.

• Net profit attributable to equity holders was AED 2,083 million, slightly down from AED 2,116 million in Q1 2024, with limited year-on-year variation in net income.

• Oil and gas segment exerted downward pressure, leading to a 7% year-on-year decline in EBITDA and a 2% drop in net income.

• CapEx increased 30% year-on-year, focused on regulated businesses, while free cash flow rose significantly due to working capital movements.

• Strategic M&A included the acquisition of Transmission Investments in the UK and TAQA Water Solutions, strengthening the offshore transmission and water portfolios.

Financial highlights

• Revenues grew 4% year-on-year to AED 14,202 million, driven by transmission, distribution, and water solutions.

• EBITDA declined 7% year-on-year, mainly due to oil and gas performance.

• Net income fell 2% year-on-year, cushioned by a lower effective UK tax rate and reduced depreciation/amortization.

• Free cash flow increased significantly, supported by working capital inflows, though normalization is expected for the rest of the year.

• Total debt at AED 63.7 billion, lower than year-end 2024, with stable average interest cost and improved liquidity.

Outlook and guidance

• Dividend policy for 2023-2025 remains, with a fixed dividend of AED 0.0375 per share for 2025; Board proposed an interim dividend of AED 843 million (AED 0.008 per share) for Q1 2025.

• CapEx expected to increase in regulated networks, decrease in oil and gas (mainly Canada), and be lower for Masdar compared to 2024.

• Working capital inflows likely to normalize through the year.

• Oil and gas profitability to remain positive but lower than last year due to weaker prices; investment in new developments may be reduced.

• The group expects to meet transitional safe harbour relief for Pillar II taxes in key jurisdictions and does not anticipate significant exposure in 2025.