Abu Dhabi National Energy Co., the state-run company known as Taqa, said second-quarter revenue dropped 15 percent as fuel sales and commodity prices fell.
Revenue slid to 6.04 billion dirhams ($1.6 billion) from 7.07 billion dirhams, the company said today. Net income rose 3 percent to 447 million dirhams as operating expenses declined. Taqa forecast a rebound in gas prices.
U.S. natural gas prices averaged $2.354 per million British thermal units last quarter, 46 percent less than the same period of 2011. Taqa’s supplemental fuel income dropped more than half to 979 million dirhams as customers used cheaper natural gas instead. Brent oil averaged $108.76 in the second quarter, compared with $116.99 in the same period a year earlier.
The first half of the year “has been a challenging period for the global economy, a fact that can be clearly seen in falling global commodity prices,” Chief Executive Officer Carl Sheldon said in a statement. “Prices have since recovered somewhat, but overall gas price weakness has had a significant impact on our North American performance.”
Oil and gas revenue dropped 4 percent to 2.99 billion dirhams. Power and water sales gained 10 percent to 2.07 billion dirhams.
The company, which spent $949 million in the first half, is targeting annual capital expenditure of about $2 billion from 2010 to 2014, Sheldon said on a conference call today. Founded in 2005, Taqa owns stakes in businesses that generate power or produce oil and natural gas in the Middle East, North America, the North Sea and India.
“We think gas prices will come back,” Stephen Kersley, chief financial officer, said on the call. “Gas in the $4 to $5 range is far more feasible.”
The shares rose 3 percent to 1.30 dirhams as of 11:15 a.m. in Abu Dhabi today. The stock has gained 8.3 percent this year.