Q1 2017 Financial Results Analyst Presentation Abu Dhabi National - - PowerPoint PPT Presentation

q1 2017 financial results analyst presentation
SMART_READER_LITE
LIVE PREVIEW

Q1 2017 Financial Results Analyst Presentation Abu Dhabi National - - PowerPoint PPT Presentation

Q1 2017 Financial Results Analyst Presentation Abu Dhabi National Energy Company PJSC (TAQA) Abu Dhabi, 11 May 2017 Disclaimer These materials have been prepared by the Abu Dhabi National Energy Company - TAQA (Company) . These materials


slide-1
SLIDE 1

Q1 2017 Financial Results Analyst Presentation

Abu Dhabi National Energy Company PJSC (TAQA) Abu Dhabi, 11 May 2017

slide-2
SLIDE 2

Disclaimer

5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 1

These materials have been prepared by the Abu Dhabi National Energy Company - TAQA (“Company”). These materials are for information purposes only and do not constitute a prospectus, offering memorandum or offering circular or an offer to sell any securities and are not intended to provide the basis for any credit or any third party evaluation of any securities or any offering of them and should not be considered as a recommendation that any investor should subscribe for or purchase any securities. The information contained herein is preliminary as of the date hereof, supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered. Any investor who subsequently acquires any securities must rely solely on any final offering memorandum published in connection with such securities, on the basis of which alone purchases of or subscription for any securities may be made. In addition, investors should pay particular attention to any sections of any such final offering memorandum describing any risk factors. The information contained herein is subject to change without notice and past performance is not indicative of future results. The Company is under no obligation to update or keep current the information contained herein. No person shall have any right of action (except in case of fraud) against the Company or any other person in relation to the accuracy or completeness of the information contained herein. The merits or suitability of any securities to any investor's particular situation should be independently determined by such investor. Any such determination should involve inter alia, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of any securities. No person is authorized to give any information or to make any representation not contained in and not consistent with these materials and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of the Company. These materials are confidential and are being submitted to selected recipients only. They may not be taken away, reproduced (in whole or in part), distributed or transmitted to any other person without the prior written consent of the Company. These materials are not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. In particular, these materials are not intended for distribution, except (i) to accredited investors as defined under applicable Canadian securities laws, (ii) within the United States to persons that are qualified institutional buyers under Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities Act") and (iii)

  • utside the United States to persons that are not U.S. persons (as defined in Regulation S under the Securities Act) in offshore transactions in compliance

with Regulation S. These materials contain, or may be deemed to contain, "forward-looking statements" (as defined under applicable Canadian securities laws and in the U.S. Private Securities Litigation Reform Act of 1995). By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of the Company may vary from the results expressed in,

  • r implied by, the following forward looking statements, possibly to a material degree. Any investment in securities is subject to various risks, such risks

should be carefully considered by prospective investors before they make any investment decisions.

slide-3
SLIDE 3

Corporate updates

  • Board of Directors elected at AGM
  • Al Hajeri re-elected as Chairman
  • ADWEA consolidates shareholding
  • S&P updates corporate credit rating

5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 2

slide-4
SLIDE 4

Q1 results summary

  • Improvement in realised oil and gas prices
  • Transformation savings embedded
  • Steady performance in Power & Water
  • Oil & Gas volumes impacted by prior capex cuts
  • EBITDA up 23%, free cash flow up 35%
  • Net income of AED 77 million(a)
  • Strong liquidity of AED 12.8 billion
  • Debt reductions of AED 675 million

(a) Profit attributable to common shareholders

5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 3

slide-5
SLIDE 5

Commodity price environment Significant improvement Q/Q

5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 4

Crude oil

  • Realised oil price up 62% vs Q1 2016
  • Supported by OPEC cuts announced in Q4 2016
  • Pressured by stronger US production growth, full

inventories, positive supply outlook in other countries Natural gas

  • Realised gas prices up 57% vs Q1 2016
  • Winter price dip due to warmer weather in 2017
  • New US export capabilities shrinking inventories

30 40 50 60 2016 2017

Brent WTI

2 4 6 2016 2017

Henry Hub AECO NBP

Oil prices ($/bbl) Gas prices $/mmbtu

slide-6
SLIDE 6

Power & Water Stable production and financial performance

5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 5

Power generation (GWh)

  • Continued strong operational performance
  • Total power generation 16,413 GWh
  • Technical availability at 84.3%, impacted by forced
  • utages and maintenance
  • Equivalent forced outage rate at 2.8%
  • Water volumes increase to 57,216 MIG
  • Stable financials reflect contracted nature of

business

  • Revenues at AED 2.7 billion
  • EBITDA of AED 1.5 billion

Water desalination (MIG)

59,430 56,584 57,216 Q1 2015 Q1 2016 Q1 2017 15,898 17,022 16,413 Q1 2015 Q1 2016 Q1 2017

slide-7
SLIDE 7

Oil & Gas Sustained efficiencies from transformation

5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 6

Average production (mboe/d)

  • Production at 132,200 barrels of oil equivalent per day
  • Production declined 14% impacted by the 70% oil & gas

capex reduction compared to 2014 (pre-transformation).

  • North America at 79,300 boed; Europe at 52,900 boed
  • Commodity price environment stabilising
  • Further reductions in per barrel operating cost despite

production declines

  • Positive Net Backs
  • Revenues increase 17% to AED 1.5 billion; EBITDA up

81% to AED 839 million

Unit operating costs ($/boe)

157.9 153.7 132.2 Q1 2015 Q1 2016 Q1 2017 27.8 23.3 22.25 8.5 7.6 7.24 2015 2016 Q1 2017 Europe North America

slide-8
SLIDE 8

Capital Expenditure Increased investment focused on core operations

5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 7

  • Q1 2017 Capex up 69% to AED 458 million

following several years of deep cuts

  • 2017 forecast at AED 1.8 billion
  • Increase in capex in line with commodity price

recovery, to protect and sustain the value of global assets

  • Follows several years of deep cuts
  • Self-funded by cash generated by the business

Capex (AED million)

271 458 Q1 2016 Q1 2017

slide-9
SLIDE 9

Financial performance Relatively stable cash flows despite commodity price volatility

Abu Dhabi National Energy Company PJSC (TAQA) 5/10/2017 8

Revenues (AED billion) Net Income (AED billion)* Free cash flow** (AED billion) EBITDA (AED billion)

**Free Cash Flows represents Operating less Investing Cash Flows

3.91 4.14 Q1 2016 Q1 2017

  • 0.61

0.08 Q1 2016 Q1 2017 1.97 2.43 Q1 2016 Q1 2017 1.50 2.03 Q1 2016 Q1 2017

*Profit attributable to common shareholders

slide-10
SLIDE 10

Liquidity and key ratios Strong liquidity and proactive management of maturities

Abu Dhabi National Energy Company PJSC (TAQA) 5/10/2017 9

Q1 2016 Q1 2017 Net debt / net capital 87% 85% EBITDA/Interest 2.0x 2.6x Net Debt/EBITDA* 7.8x 7.5x

Key ratios

  • Robust liquidity position:
  • Cash and cash equivalents: AED 3.7 billion
  • Undrawn credit facilities: AED 9.1 billion
  • Staggered and manageable maturity profile:
  • March 2017 maturity refinanced ahead of time in

October 2016

  • Evaluating options for Oct 2017 maturity ($500m)
  • Improving ratios
  • Recovering ratios following improved financial

performance

1,000 2,000 3,000 17 18 19 20 21 22 23 24 26 36 Bonds Drawn RCF Undrawn RCF JPY Loan

Debt Maturity Profile ($ million)*

*as at 31 March 2017

slide-11
SLIDE 11

Concluding remarks

Abu Dhabi National Energy Company PJSC (TAQA) 5/10/2017 10

  • Transformation savings sustainably

embedded across organisation

  • Ongoing focus on cost discipline and
  • perational efficiency
  • Balance sheet strengthened following

land transfer from ADWEA

  • Investing in most profitable assets to

maximise cash flow

slide-12
SLIDE 12
slide-13
SLIDE 13

Appendix

slide-14
SLIDE 14

Operational Data – Power & Water KPIs

Abu Dhabi National Energy Company PJSC (TAQA) 5/10/2017 13

International plants Q1 2016 Q1 2017 Power generation (GWh) 4,403 4,077 Technical availability (%) 87.0 82.7 UAE domestic plants Q1 2016 Q1 2017 Power generation (GWh) 12,619 12,336 Water desalination (MIG) 56,584 57,216 Technical availability (%) 87.1 84.7

slide-15
SLIDE 15

Operational Data – Oil & Gas Production

Abu Dhabi National Energy Company PJSC (TAQA) 5/10/2017 14

Europe Q1 2016 Q1 2017 Crude oil (mbbls/day) 53.3 40.3 Natural gas (mmcf/day) 76.8 67.9 Natural gas liquids (mboe/day) 1.4 1.2 Average (mboe/day) 67.5 52.9 North America Q1 2016 Q1 2017 Crude oil (mbbls/day) 14.3 13.5 Natural gas (mmcf/day) 361.7 323.4 Natural gas liquids (mboe/day) 11.5 11.9 Average (mboe/day) 86.1 79.3 Total Production Q1 2016 Q1 2017 Crude Oil (mbbls/day) 67.7 53.8 Natural Gas (mmcf/day) 438.6 391.3 Natural Gas Liquids (mboe/day) 12.9 13.1 Average (mboe/day) 153.7 132.2

slide-16
SLIDE 16

Operational Data – Oil & Gas Pricing

5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 15

Europe Q1 2016 Q1 2017 Crude oil ($/bbl) 33.58 54.48 Natural gas ($/mcf) 4.19 6.09 Natural gas liquids ($/boe) 22.98 37.69 Average ($/boe) 31.76 49.71 North America Q1 2016 Q1 2017 Crude oil ($/bbl) 22.27 39.39 Natural gas ($/mcf) 1.36 2.24 Natural gas liquids ($/boe) 15.98 27.52 Average ($/boe) 11.56 19.99

slide-17
SLIDE 17

Operational Data – Oil & Gas Netbacks

Abu Dhabi National Energy Company PJSC (TAQA) 5/10/2017 16

Europe Q1 2016 Q1 2017 Gross price ($/boe) 31.76 49.71 Royalties ($/boe) 0.00

  • Net sales price ($/boe)

31.76 49.71 Operating costs ($/boe) 19.04 22.25 Operating netback ($/boe) 12.72 27.46 North America Q1 2016 Q1 2017 Gross price ($/boe) 11.56 19.99 Royalties ($/boe) 0.63 2.58 Net sales price ($/boe) 10.94 17.41 Operating costs ($/boe) 6.38 7.24 Operating netback ($/boe) 4.55 10.17