Abu Dhabi’s Taqa reports $13mn loss in Q3

The loss was expected, given the sharp decline in oil prices. The company’s latest result brings its loss for the first nine months of this year to $158mn, from a profit of $168.7mn a year earlier, The National newspaper reported.

The losses were driven by a halving of revenues at Taqa’s oil and gas division to $408mn in Q3 2015, from $871mn in Q3 2014.

“In challenging times our overall results continue to reflect our environment,” said Taqa’s chief operating officer, Edward Lafehr.

Taqa’s executives however pointed out to some operational improvements. The company also had a significant participation at ADIPEC 2015 and its elaborate stand highlighted some of the projects and achievements.

Revenues from electricity and water operations surpassed those of oil and gas and held steady in Q3 2015 at $626mn.

Lafehr said the improved operational performance, especially in water and electricity, as well as Taqa’s firm cash and liquidity position, ‘underpins our efforts as management tries to reset the financial and operating framework of the business’.

Even before the oil price collapse, Taqa was hit by its exposure to natural gas assets in North America, where prices were first to tumble.

This was exacerbated by the oil price crash and the company’s heavy debt load, which stood at about $19.6mn at the end of the latest quarter, and interest payments which have been running at well above Taqa’s gross profit for several quarters.

Taqa has cut its capital expenditure by $517mn, or 43% year-on-year. Taqa’s finance chief Grant Gillon said operating expenses had been cut by $299mn already, putting the cuts well ahead of the target of $408mn by the end of next year.

The cuts have come at a cost – Taqa said its oil and gas production fell about 9% to 144,900 barrels of oil equivalent per day (boepd), from 158,500 boepd, in the first nine months of the year.

In addition, Taqa cut 39% of jobs at its Abu Dhabi headquarters and reduced its global oil and gas workforce by 25%.