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Taqa swings back to profit

Abu Dhabi - Revenues in second quarter also edge up

Abu Dhabi National Energy (Taqa) said on Thursday it swung to a profit in the second quarter from a year-earlier loss, aided by higher oil prices and a one-off gain.
The state-owned oil explorer and power supplier made a profit attributable to shareholders of Dh35 million ($9.5 million) in the three months to June 30, compared with a Dh588 million loss a year ago.
Taqa suffered a full-year loss for 2016 of Dh18.55 billion because of impairments related to its oil and gas assets as energy prices slumped, but it has made profits in both quarters so far this year.
Revenues in the second quarter edged up to Dh4.2 billion from Dh4 billion in the prior-year period. Brent crude oil averaged $50.13 a barrel in the latest quarter versus $46.01 a year ago, Taqa said. Profit was boosted by an Dh86 million gain from "de-recognition of a subsidiary". In May Taqa pulled out of its wholly owned subsidiary in India, Himachal Sorang Power.
"We did not view Sorang as core to our long-term power and water strategy as it is a relatively small and un-contracted power asset," a Taqa spokesman told Reuters, adding that it did not have significant synergies with the rest of the company's power and water business. But Taqa remains committed to its other India project, a 250MW lignite-fired power plant in the southern state of Tamil Nadu, he said.
Taqa said it was on track to meet a target of Dh1.8 billion of capital spending this year after it spent Dh619 million in the first half of 2017.
The company's total debt fell to Dh70.5 billion in June from Dh72.2 billion last December.
In April, the Abu Dhabi Water and Electricity Authority raised its stake in Taqa to 74 per cent from 52.4 per cent after granting Taqa land valued at Dh18.7 billion that could potentially offset accumulated losses.
Taqa, which operates in 11 countries, also said in April that it might sell some of its oil and gas interests in North America to raise capital for its core business. In July, Taqa said it had started oil production at its Atrush Block in the Kurdistan region of Iraq with initial production expected to be around 30,000 barrels of oil equivalent per day.