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Q1 2017 Financial Results
Analyst Presentation Abu Dhabi National Energy Company PJSC (TAQA)
Abu Dhabi, 11 May 2017
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 anysecurities 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 beconsidered as a recommendation that any investor should subscribe for or purchase any securities. The information contained herein is preliminary as ofthe date hereof, supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered. Anyinvestor who subsequently acquires any securities must rely solely on any final offering memorandum published in connection with such securities, on thebasis of which alone purchases of or subscription for any securities may be made. In addition, investors should pay particular attention to any sections ofany such final offering memorandum describing any risk factors. The information contained herein is subject to change without notice and pastperformance is not indicative of future results. The Company is under no obligation to update or keep current the information contained herein. No personshall 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 theinformation contained herein.
The merits or suitability of any securities to any investor's particular situation should be independently determined by such investor. Any suchdetermination 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 ormade, 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 useby any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. In particular, thesematerials are not intended for distribution, except (i) to accredited investors as defined under applicable Canadian securities laws, (ii) within the UnitedStates 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)outside the United States to persons that are not U.S. persons (as defined in Regulation S under the Securities Act) in offshore transactions in compliancewith Regulation S.
These materials contain, or may be deemed to contain, "forward-looking statements" (as defined under applicable Canadian securities laws and in theU.S. Private Securities Litigation Reform Act of 1995). By their nature, forward-looking statements involve risks and uncertainties because they relate toevents 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,or implied by, the following forward looking statements, possibly to a material degree. Any investment in securities is subject to various risks, such risksshould be carefully considered by prospective investors before they make any investment decisions.
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
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
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
0
2
4
6
2016 2017
Henry Hub AECO NBP
Oil prices ($/bbl)
Gas prices $/mmbtu
Power & Water
Stable production and financial performance
5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 5
Power generation (GWh) Continued strong operational performance
- Total power generation 16,413 GWh
- Technical availability at 84.3%, impacted by forced
outages and maintenance
- Equivalent forced outage rate at 2.8%
- Water volumes increase to 57,216 MIG
Stable financials reflect contracted nature of
business
- Revenues at AED 2.7 billion
- EBITDA of AED 1.5 billion
Water desalination (MIG)
59,430 56,584 57,216
Q1 2015 Q1 2016 Q1 2017
15,89817,022 16,413
Q1 2015 Q1 2016 Q1 2017
Oil & Gas
Sustained efficiencies from transformation
5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 6
Average production (mboe/d) Production at 132,200 barrels of oil equivalent per day
- Production declined 14% impacted by the 70% oil & gas
capex reduction compared to 2014 (pre-transformation).
- North America at 79,300 boed; Europe at 52,900 boed
Commodity price environment stabilising
Further reductions in per barrel operating cost despite
production declines
Positive Net Backs
Revenues increase 17% to AED 1.5 billion; EBITDA up
81% to AED 839 million
Unit operating costs ($/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
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
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
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 ($500m)
Improving ratios
- Recovering ratios following improved financial
performance
0
1,000
2,000
3,000
17 18 19 20 21 22 23 24 26 36
Bonds Drawn RCF Undrawn RCF JPY Loan
Debt Maturity Profile ($ million)*
*as at 31 March 2017
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
operational efficiency
Balance sheet strengthened following
land transfer from ADWEA
Investing in most profitable assets to
maximise cash flow
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
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
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
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
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