Abu Dhabi National Energy Company (TAQA) Q2 2024 earnings summary

Executive summary

• Q2 2024 net profit rose 18% year-over-year to AED 2.3 billion, with adjusted EBITDA up 2% to AED 5.4 billion, driven by strong T&D and SWS performance offsetting oil and gas and generation declines.

• SWS Holding consolidation and stable utility segment performance enhanced results, while oil and gas faced pressure from lower prices and production.

• CapEx more than doubled to AED 2.1 billion, and free cash flow surged 92% year-over-year to AED 4.0 billion, supported by working capital changes.

• Interim dividend of 0.7 fils per share approved for Q2 2024, consistent with policy.

• ESG disclosure improved with commencement of Scope 3 emissions reporting.

Financial highlights

• Q2 2024 revenue was AED 13.5 billion, down 1% year-over-year; adjusted EBITDA reached AED 5.4 billion, up 2%.

• Net profit attributable to shareholders rose 18% year-over-year to AED 2.3 billion.

• CapEx increased 124% year-over-year to AED 2.1 billion, mainly for project development.

• Free cash flow for H1 2024 was AED 4.3 billion.

• H1 2024 revenue grew 2% to AED 27.2 billion; adjusted EBITDA up 4% to AED 10.9 billion.

Outlook and guidance

• Utilities business expected to continue strong growth, with ongoing organic and inorganic expansion opportunities.

• Focus on enhancing ESG disclosure, including Scope 3 emissions.

• Sufficient liquidity to fund operations through year-end; potential bond market return if conditions are favorable in late Q3 or Q4.

• Integration of SWS Holding expected to further transform the group into a vertically integrated utility leader.

• Fitch upgraded credit rating to AA, reflecting business resilience and government ties.