Taqa Posts Second-Quarter Loss as Oil and Power Sales Slide

Abu Dhabi National Energy Co., the state-controlled utility known as Taqa, reported a second-quarter loss as sales fell because of a cut in U.K. oil output and production halts at two power plants.

Taqa lost 172 million dirhams ($46.8 million) in the period, compared with a 447 million-dirham profit a year earlier, it said in a statement today. Sales declined 3.1 percent to 5.86 million dirhams. The shares dropped as much as 3.9 percent, the most since June 3, and traded 4 fils, or 3.1 percent, lower at 1.25 dirhams at 1:13 p.m. in Abu Dhabi.

The utility, 75 percent owned by the largest sheikhdom in the United Arab Emirates, has stakes in businesses producing power and pumping oil and natural gas in the Middle East, North Sea, India and North America. Last year, it expanded by adding oil-field operations in northern Iraq and buying U.K. crude deposits from BP Plc.

“The loss was characterized by some short-term operational issues, and the worst is behind us,” Chief Financial Officer Stephen Kersley said on a conference call. “We forecast a positive outcome for the full year.”

The company aims to sell bonds within the next year to refinance $1.2 billion in debt due in 2014, Kersley said in a separate telephone interview today. Taqa will sell bonds when the company can achieve the best pricing, he said, declining to give a more specific time for the sale.

Renewable Energy

Taqa, which this month bought a stake in a U.S. wind-power plant, is looking at generation from renewable energy sources as an area for growth, Kersley said. The company is interested in bidding for a wind-power project in Morocco, he said. With power consumption rising in Abu Dhabi, Taqa foresees growing demand for the power stations it owns and operates and for future financing to fund their construction, Kersley said.

Production is expected to start at the Iraqi field in 2015, while repair work reduced flows at a North Sea oil platform after a leak at the facility, the company said. Taqa said this month it plans to resume output after a shutdown at the North Sea Cormorant Alpha platform, which pumps 10,000 barrels a day of crude. Power plants that stopped producing in the quarter have resumed, Kersley said.

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