Taqa Plunges After Posting Loss on Americas Asset Impairment

Abu Dhabi National Energy Co. (TAQA) fell the most in almost eight years after the government-controlled utility posted a full-year loss and said it won’t pay a dividend as it wrote down North American assets.

The stock plunged 10 percent, the most since March 2009, to close at 1.26 dirhams in Abu Dhabi, taking its decline this year to 14 percent. The net loss was 2.52 billion dirhams ($686 million) after a profit of 649 million dirhams a year earlier, the company said in a statement today. Taqa took a 3.25 billion-dirham impairment mainly linked to reserve revisions and lower output expected in North America. Sales fell 7 percent.

“It’s a non-cash, one-time impairment, so it won’t hurt our ability to fund our operations or manage debt,” Chief Financial Officer Stephen Kersley said on a conference call. “We’re less optimistic than in the past on long-term prices” for natural gas in North America, leading Taqa to cut earnings expectations for its Canadian assets, Kersley said.

Taqa has stakes in businesses generating power and producing crude oil and natural gas in the Middle East, North Sea, India and North America. It expanded this year by adding two hydroelectric power plants in India and last year took over oilfield operations in northern Iraq and U.K. crude and gas deposits from BP Plc.

Refinancing

Carl Sheldon, Taqa’s chief executive officer since October 2011, will step down next month. Edward LeFehr will take on the new role of chief operating officer from his current position as head of Taqa’s North American business. The company cut jobs at its Canadian business and sold some holdings there last year as North American gas prices brought in less profit than expected, Sheldon and Kersley said in November.

Capital spending will be between $2 billion to $2.5 billion this year, slightly less than in 2013 and in line with the company’s targets, Sheldon said on the conference call. The company had 3.9 billion dirhams in cash and about 11 billion dirhams in undrawn credit lines, Kersley said.

Taqa will take advantage of “favorable opportunities” to manage its debt, Kersley said. The company plans to refinance about $1.2 billion in borrowings due in September, he said last November.

“Taqa’s spreads are tightening in the market and that’s very good for us,” Kersley said, declining to comment on timing for a possible debt sale.

To contact the reporter on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net

To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Shaji Mathew, Claudia Maedler

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