Abu Dhabi's Taqa Posts $5.2 Billion Loss on Oil Asset Write-Off

  • Booked impairments of 16.9b dirhams due to low oil prices
  • The company has a market value of 2.8 billion dirhams

Abu Dhabi National Energy Co. reported its biggest loss on record as the state-controlled power and oil company wrote down the value of oil assets after prices slumped.

The loss widened to 19 billion dirhams ($5.2 billion) last year from 1.8 billion dirhams in 2015, the company known as Taqa said in a statement. It booked an impairment of 16.9 billion dirhams, mainly related to its oil and gas assets, “which is a one-time, non-cash charge” that has no impact on its ability to repay debt. Revenue fell 17 percent to 16.1 billion dirhams.

Abu Dhabi, holder of about 6 percent of global oil reserves, is reorganizing and merging several of its companies to help save costs as it grapples with an about 50 percent slump in oil prices since the middle of 2014. Taqa’s two-year transformation program saved 13.2 billion dirhams, including a capital expenditure cut of 8.6 billion dirhams and a 25 percent reduction in global headcount or more than 1,000 positions.

The energy producer also signed a land-lease agreement valued at 18.7 billion dirhams. The land lease “avoids any share recapitalization or dilution of the existing shareholders, and provides a greater opportunity for Taqa shareholders to realize long-term value from their investments,” Chairman Saeed Mubarak Al-Hajeri said.

Taqa, which operates in 11 countries, won’t pay a dividend for 2016. The shares are unchanged over the past year, giving the company a market value of 2.8 billion dirhams.

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