Q3 2022
MANAGEMENT’S
DISCUSSION &
ANALYSIS
For the period ended
30 September 2022ABU DHABI NATIONAL ENERGY COMPANY PJSC (TAQA)
MANAGEMENT’S DISCUSSION AND ANALYSIS
1. Health, Safety and Environment
2. Summary of Results
3. Results of Operations by Business Line
4. Capital Structure and Liquidity
5. Capital Expenditure
This document should be read in conjunction with TAQA’s unaudited consolidated financial statements for the period ended 30
September 2022. Within the MD&A we use the terms “the Group”, “we”, and “our” to refer to TAQA.
1. Health, Safety and Environment (HSE)
Period ended 30 September
T&D Generation (1) Oil & Gas Group Total
HSE Overview 2022 2021 2022 2021 2022 2021 2022 2021
Fatalities Number - 1 - - - - - 1
Recorded injury rate (RIR) (incident/1 million hrs) 0.23 0.08 0.00 0.55(2) 2.14 2.26(3) 0.63 0.61
Lost time injury (LTI) Number 3 - - 2 10 5 13 7
Reportable spills Number - - 1 2 19 25 20 27
1) Refers to TAQA operated assets only
2) Q3-2021 Manhours were revised
3) O&G Q3-2021 RIR was updated based on revised manhours calculation
“Safe” is our first value. We put safety above all else and HSE is a fundamental part of TAQA’s business.
A strict set of HSE rules, guidelines, and reporting tools to ensure a high level of professionalism and
adherence to regulations is enforced wherever we operate. All members of our workforce are
empowered with the responsibility and authority to stop unsafe work.
The Group RIR of 0.63 for Q3 2022 is higher than the Group RIR of 0.61 for the same period in 2021,
and whilst the RIR has increased slightly the number of LTIs in 2022 increased from 7 in Q3 2021 to 13
in Q3 2022. We continue to emphasize and implement HSE improvement programs in our operating
companies with focus on improved reporting and rigorous categorization of all incidents.
20 spills were reported in Q3 2022 compared to 27 in Q3 2021, with the total volume released being
80% less than the same period in 2021.
Managing HSE performance requires constant vigilance, targeted interventions, and continuous safety
and environmental improvement programs. Ongoing measures include behavioral safety and
leadership programs, further developing our HSE management system, contractor management
enhancements, the delivery of focused safety audits, increased reporting of unsafe acts, conditions and
near misses, and the sharing of learnings from incidents.
Through improved investigations, learning from incidents and addressing emerging trends and insights,
we strive for continuous improvement in safety within our operations in line with TAQA’s HSE
management system. We continue to focus our efforts on eliminating injuries and fatalities in our
activities and seeking to increase our influence on our partners where TAQA is not the operator, through
shared workshops and HSE reviews.
Page 2 of 8
POWERING A THRIVING FUTURE2. Summary of Results
Three months ended Nine months ended
30-Sep 30-Sep 30-Sep 30-Sep
(AED million, except where indicated) 2022 2021 2022 2021
Commercial Availability – Generation1 % 98.5% 96.7% 97.8% 97.3%
Oil & Gas Production2 mboe/d 121.1 116.3 123.1 121.5
T&D Regulated Asset Value (RAV) - - 75,553 77,3895
Gross Revenues 13,697 11,9806 38,667 34,0416
Adjusted EBITDA3 5,549 4,4706 16,471 14,2666
Net Income4 2,236 1,403 6,519 4,259
1) Represents weighted average for all power producing assets based on plant capacity.
2) Includes working interest production from North America and Europe, and entitlement volumes from Iraq.
3) Adjusted EBITDA is defined as IFRS earnings before finance costs, net foreign exchange gain/loss, interest income, income tax,
depreciation, depletion and amortization and other income.
4) Net income above is share attributable to common shareholders of TAQA.
5) RAV figures as at 31 December 2021
6) Revenues/EBITDA for comparative balances were restated due to classification of Netherlands upstream businesses as held for
sale and a discontinued operation as at Q3 2022.
Financial highlights:
• Group revenues were AED 38.7 billion, 14% higher than the prior-year period, primarily due to
higher commodity prices within the Oil & Gas segment.
• Adjusted EBITDA was AED 16.5 billion, up 15%, benefiting from strong revenue growth and
slight cost improvement.
• Net income (TAQA-share) was AED 6.5 billion, 53% higher than the prior-year period. In
addition to strong operational performance, the bottom line benefitted from a return to
normalised depreciation expense in 2022 within the Oil & Gas segment.
• Capital expenditure was AED 2.5 billion, 28% lower than the prior-year period, with the
Transmission & Distribution segment leading the reduced spending.
• Free cash flow was AED 12.8 billion, 13% higher than the same period last year, supported by
a combination of higher cash generation and lower capex.
• As at 30 September, the Group had AED 24.7 billion in cash and cash equivalents and undrawn
corporate credit facilities.
Operational highlights:
• Transmission network availability for power and water was 98.6%, compared to 98.3% a slight
improvement on the prior-year period.
• Generation global commercial availability was 97.8%, a slight improvement over 97.3 % for the
same period last year.
• Oil & Gas average production volumes were 123.1 thousand barrels of oil equivalent per day
(boepd), largely in line with the same period last year.
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POWERING A THRIVING FUTURE3. Results of Operations by Business Line
Period ended 30 September
Corp. &
T&D Generation Oil & Gas Group Total
Group Consolidated Elimination
I ncome Statement
2022 2021 2022 2021 2022 20211 2022 2021 2022 20211
(AED millions)
Total revenues 20,160 19,952 10,569 9,095 7,938 4,994 - - 38,667 34,041
Operating expenses (13,460) (12,875) (4,779) (3,393) (2,956) (2,312) 26 26 (21,169) (18,554)
G&A expenses (811) (770) (182) (215) (141) (145) (291) (296) (1,425) (1,426)
Share of results of
- - 397 212 - - 1 (7) 398 205
associates & joint ventures
Adjusted EBITDA 5,889 6,307 6,005 5,699 4,841 2,537 (264) (277) 16,471 14,266
Depreciation, depletion
(3,090) (3,074) (3,468) (3,536) (715) (1,647) 22 28 (7,251) (8,229)
and amortization
Finance costs (2) (3) (1,327) (1,367) (321) (302) (545) (625) (2,195) (2,297)
Other gains / (losses) 149 149 (191) 21 29 778 83 83 70 1,031
Tax (expense) / credit - - (268) (184) (638) (398) 46 16 (860) (566)
Net profit (loss) 2,946 3,379 751 633 3,196 968 (658) (775) 6,235 4,205
Profit from discontinued
- - - - 343 89 - - 343 89
operations
Profit for the period 2,946 3,379 751 633 3,539 1,057 (658) (775) 6,578 4,294
Non-controlling interest - - 59 35 - - - - 59 35
Net profit (TAQA share) 2,946 3,379 692 598 3,539 1,057 (658) (775) 6,519 4,259
1) 2021 comparatives were restated due to classification of certain upstream business units as held for sale and a discontinued operation as at Q3 2022.
As at
Group Consolidated Corp. &
T&D Generation Oil & Gas Group Total
Balance Sheet Elimination
30-Sep 31-Dec 30-Sep 31-Dec 30-Sep 31-Dec 30-Sep 31-Dec 30-Sep 31-Dec
(AED millions) 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Property, plant &
81,494 83,335 31,314 33,691 5,226 5,468 5 (97) 118,039 122,397
equipment
Operating financial assets - - 9,318 10,322 - - - - 9,318 10,322
Investment in and loans to
797 - 1,630 1,279 - - 405 404 2,832 1,683
associates & joint ventures
Intangible assets 4,755 4,755 12,275 13,186 61 33 - - 17,091 17,974
Deferred tax assets - - 63 63 5,856 5,535 1 - 5,920 5,598
Asset classified as held for
- - - - 200 - - - 200 -
sale
Other assets 5,509 4,667 9,970 9,160 2,634 2,471 8,561 5,925 26,674 22,223
Total Assets 92,555 92,757 64,570 67,701 13,977 13,507 8,972 6,232 180,074 180,197
Liabilities associated with
- - - - 808 - - - 808 -
assets held for sale
Total Liabilities 15,426 14,538 42,580 43,863 17,655 16,981 27,716 31,613 103,377 106,995
Total Equity 77,129 78,219 21,990 23,838 (3,678) (3,474) (18,744) (25,381) 76,697 73,202
Page 4 of 8
POWERING A THRIVING FUTURETransmission & Distribution Business
The Transmission & Distribution (T&D) business contributed net income for the nine month period of
AED 3.0 billion, a decrease of AED 0.4 billion when compared to the comparative period . The reduction
was mainly due to recognition of one-off revenues during 2021.
Nine month period on period revenues increased by AED 0.2 billion to AED 20.1 billion mainly due to
higher pass-through bulk supply tariffs (BST) of AED 0.6 billion, which was partially offset by AED 0.3
billion reduction in revenue due to a one-off recognition of projects in 2021, and AED 0.1 billion lower
transmission use of system charges (TUoS).
Higher BST pass-through cost was also the main driver of the AED 0.6 billion increase in operating
costs to AED 13.4 billion for nine months ending 30 September 2022.
Generation Business
Generation business contributed a net income of AED 0.7 billion, an increase of AED 0.1 billion when
compared to the Q3 year to date comparatives of the prior year.
Generation revenues were AED 1.5 billion higher than last year, totaling over AED 10.6 billion. The
increase is mainly due to higher pass-through coal fuel revenues of AED 1.4 billion in Morocco, which
is also reflected as a fuel cost in operating expenses. Revenues from our domestic fleet decreased by
almost AED 0.5 billion, mostly due the decommissioning of the Taweelah A2 plant which contributed
AED 0.3 billion in 2021, as well as lower technical availability compared to prior period in other key
assets. The decrease in domestic revenues however was mostly offset by increase in revenues of AED
0.5 billion in our North American asset due to higher dispatch and more favorable prices.
Operating expenses within Generation increased by AED 1.4 billion to AED 4.8 billion, mainly driven by
higher fuel pass-through costs of AED 1.4 billion in our Moroccan business mentioned above.
The Group’s share of results of associates and joint ventures was AED 0.4 billion, an improvement of
almost AED 0.2 billion when compared to the prior period. This was mainly driven by the Group’s
investment in Sohar Aluminium and its improved results on the back of higher aluminum prices.
Other gains/(losses) mainly relate to foreign exchange losses of AED 0.2 billion relating to Moroccan
asset due to the weakening of Euro and Moroccan Dirham versus USD.
The increase in tax charge mainly reflected increased profitability in Morocco.
Oil & Gas Business
The Oil & Gas business generated net income of AED 3.5 billion compared to AED 1.1 billion in the
prior period. This improvement of AED 2.4 billion in net income was largely due to the improved
commodity price environment, driving revenues to AED 7.9 billion which was an increase of AED 2.9
billion versus 2021. Net income includes profit from discontinued operations of AED 0.3 billion that
relates to Netherlands upstream oil and gas business following the Group entering into definitive
agreements to sell 100% of its ownership.
The Group’s average realised oil price rose significantly to $89.33/bbl in 2022 compared to $61.67/bbl
in 2021. Similarly, average realised gas prices increased to $8.60/mmbtu, from $3.66/mmbtu in 2021.
Average production as of end of September rose to 123.1 mboe/d, showing improvements versus 2021.
Operating costs increased by AED 0.6 billion mainly driven by higher fuel and emissions trading costs.
Depreciation expense declined by AED 0.9 billion compared to the prior period, reflecting a one-off
asset retirement obligation revision in our European assets in 2021 due to a partner default. This was
partially offset by an AED 0.6 billion related tax relief on the additional abandonment liability, recorded
as other gain / (losses) in 2021.
Tax expense for the nine month period increased by AED 0.2 billion in line with higher taxable profits,
offset partially by deferred tax credits.
Page 5 of 8
POWERING A THRIVING FUTURE4. Capital Structure and Liquidity
As at
Group Consolidated Position 30-Sep 31-Dec
(AED million) 2022 2021
Total assets 180,074 180,197
Total equity 76,697 73,202
Total debt 62,191 64,965
Net debt-to-capital ratio 1 40% 44%
Unused portion of credit facilities 13,582 13,486
Net cash and cash equivalents 11,099 8,422
Total Available Liquidity 24,681 21,908
1) ‘Net debt’ divided by ‘Total equity’ plus ‘Net debt’ where ‘Net debt’ is ‘Total debt’ less
‘Net cash and cash equivalents’
Capital Structure
TAQA’s capital structure is comprised of 40% debt based on the balance sheet values as at 30
September 2022 and includes fair value adjustments.
The Group’s external sources of funding include corporate bonds and when drawn down, the Group’s
revolving credit facility (RCF). These funds have historically been used to fund investment, acquisition
and growth within the group. The Generation subsidiaries are generally funded by project debt, either
in the form of limited or non-recourse bank loans or project bonds.
The Group continues to monitor the total debt position and refinancing options available to ensure the
debt mix and cost of debt is at an optimal level. Please refer to the ‘Maturity Profile’ section below for
updates on recent debt issuances.
Interest rates for the Group’s project debt, bonds and loans are largely fixed, either contractually or
through interest rate hedging arrangements. The main exception is TAQA’s RCF, which attracts floating
market rates and therefore is exposed to term Secured Overnight Financing Rate (SOFR) borrowing
rates. During 2021, TAQA settled the RCF facility in full. As our medium and long-term bonds and loans
mature, we may be required to refinance the debt at market rates or utilise other available liquidity.
Accordingly, TAQA is partially exposed to interest rate risk in both the medium and long term.
At 30 September 2022, after taking into account the effect of interest rate swaps, approximately 98%
the Group’s borrowings are at a fixed rate of interest (December 2021: 95%).
The Group’s overall cost of debt averaged at 4.58% during the nine months ended 30 September 2022.
Page 6 of 8
POWERING A THRIVING FUTURELiquidity
The Group’s total available liquidity at 30 September 2022 was AED 24.7 billion, an increase of AED
2.8 billion on the position at the end of 2021. Total available liquidity was made up of AED 13.6 billion
of available credit facilities and AED 11.1 billion of net cash and cash equivalents.
Available credit facilities mainly comprise the Group’s AED 12.9 billion (US $3.5 billion) multicurrency
revolving credit facility (RCF) with a syndicate of 20 banks. The RCF remains undrawn as at 30
September 2022.
As of 30 September 2022, 11% of the Group’s total debt is classified as current (31 December 2021:
5%), based on the carrying value of borrowings.
Maturity Profile
The Group’s financial liabilities repayment schedule as at 30 September 2022 based on contractual
undiscounted payments is as follows:
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Corporate - Bonds/Other Subsidiaries - Bonds Subsidiaries - Bank Loans
As of 30 September 2022, the Group total debt was AED 62.2 billion (31 December 2021: AED 65.0
billion), a reduction of AED 2.8 billion during the first nine months of the year.
Debt reduction of AED 2.8 billion included the Group’s full repayment of its AED 0.6 billion Islamic loan,
which matured in March 2022, plus an additional AED 1.7 billion of scheduled project debt repayments
and AED 0.2 billion of forex revaluation in our Generation business, and AED 0.3 billion of recurring fair
value amortization adjustment to corporate debt.
In the first quarter of 2022, the group raised its first green finance by successful pricing of green senior
secured bonds for an aggregate principal amount of USD 700.8 million (AED 2.6 billion). The bond
refinanced existing debt facilities of Sweihan PV Power Company.
In the third quarter of 2022, one of our domestic generation assets, Al Mirfa International Power & Water
company (MIPCO), successfully refinanced its project debt of AED 4 billion with a syndicate of leading
banks, extending its maturity to 2042.
Additionally in the third quarter, the Group refinanced its RCF of AED 12.9 billion (USD 3.5 billion), to
extend the facility until 2027, transitioning from LIBOR to term SOFR and benefitting from very
competitive and improved pricing.
Page 7 of 8
POWERING A THRIVING FUTURE5. Capital Expenditure
Period ended 30 September
(AED million) T&D Generation O&G Corporate Group Total
2022 1,655 149 686 8 2,498
2021 2,565 175 708 - 3,448
Capital Expenditure refers to additions to Property, Plant and Equipment, excluding right of use assets.
The Group’s total capital expenditure for the first nine months of 2022 was AED 2.5 billion, a 28%
decrease versus the prior period.
Transmission & Distribution capital expenditure for the period was AED 1.7 billion, a 35% decrease
versus the prior period mainly driven by increased in number of projects being settled in 2021 from prior
periods, due to timing and phasing of project execution throughout the sector.
A small reduction in Generation capital expenditure in 2022 versus the prior year relates to planned
major maintenance of the domestic UAE assets cycles, in line with established maintenance programs.
Oil & Gas capital expenditure was 3% lower than 2021. Higher spending in our North American and
Iraq assets was offset by lower spending across our European assets, as the shift into decommissioning
mode on certain late life assets continues successfully.
Jasim Husain Thabet Stephen Ridlington
Chief Executive Officer & Managing Director Chief Financial Officer
11 November 2022
Page 8 of 8
POWERING A THRIVING FUTURE

Sentiment: neutral