Abu Dhabi National Energy Company (TAQA) Investor Presentation
POWERING A THRIVING FUTURE
Disclaimer
These materials have been prepared by Abu Dhabi National Energy Company PJSC ("TAQA" or the "Company"). The information contained in this presentation may not have been reviewed or reported on by the Company's auditors. The Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.
These materials have been prepared for information purposes only and do not form part of any 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 The information contained herein supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered. 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.
This presentation may contain, or may be deemed to contain, "forward-looking statements" regarding future events or the future financial performance of the Company. These forward-looking statements include all matters that are not historical facts. The inclusion of such forward-looking information shall not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved. The Company undertakes no obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise.
TAQA publishes its financial statements in AED rounded to the nearest million. This presentation contains conversions of certain AED amounts into U.S. dollars solely for the convenience of the reader. These conversions should not be construed as representations that the AED amounts actually represent such U.S. dollar amounts or could actually be converted into U.S. dollars at the rate indicated. The UAE dirham has been pegged to the U.S. dollar at a fixed exchange rate of AED 3.6725 = U.S.$1.00 since 22 November 1980 and, unless otherwise indicated, U.S. dollar amounts in this presentation have been converted from AED at this exchange rate.
Please note that rounding differences may appear throughout the presentation.
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Table of contents
- A leading integrated utility, underpinned by strong, recurring cash flows
- Recent strategic developments
- Integrating ESG into how we do business
- Maintaining strong financial performance
- Investment thesis
- Appendix
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A leading integrated utility, underpinned by strong, recurring cash flows
POWERING A THRIVING FUTURE
A leading integrated utility at the heart of UAE's energy ambitions
1 | Building a global business upon |
solid foundations in the UAE | |
Exclusive | Right of | 23 |
1st refusal | Countries | |
Transmission in | For a minimum of | Global footprint |
Abu Dhabi and | 40% stake in | through power |
Northern Emirates | EWEC generation | generation and |
Distribution in Abu | projects in the | O&G assets. |
UAE | ||
Dhabi | ||
2 | Operations spread across three | 3 | Strong financial performance & | |||||
business lines | predictable cash flow generation | |||||||
Q1 2024 REVENUE SHARE | $14.1bn | $5.3bn | ||||||
~110,000 km | 5% | 1,250 MIGD | ||||||
3.3% YoY | -5.5% YoY | |||||||
water & | 14% | gross water | ||||||
FY 2023 Revenue | FY 2023 EBITDA | |||||||
electricity | T&D | desalination | ||||||
networks | Generation | capacity | ||||||
21% | O&G | 60% | ||||||
SWS | 41% | 70% | ||||||
gross power | ||||||||
45.0 GW1 | 107 | |||||||
generation | ~ $4.4bn | mboe/d | Average Adj. | FCF-to-EBITDA ratio | ||||
production | ||||||||
capacity | EBITDA margin | FY 2023 | ||||||
added to RAB | ||||||||
2021-2023 | ||||||||
via SWS | ||||||||
4 | Robust borrowing profile with good |
liquidity levels | |
5 | Transparent dividend policy |
6 | Continuous improvement in ESG |
performance | |
Aa3 | AA |
11% | 2.5x |
Liquidity as a % of | Net debt / LTM |
Defined dividends from
T&D and Generation
(fils/share)
2023A | 2024F2 | 2025F |
3.25 | 3.50 | 3.75 |
Variable payout
from O&G
business for
2023-2025
Discretionary
percentage of net
income
Q1 2024 highlights
11% | 9 | 27% |
YoY reduction in | Metrics obtained | Female board |
total assets (Mar - 24) | EBITDA (Mar - 24) |
Maintaining standalone investment grade rating
- Fixed dividends to be paid quarterly
- Variable dividend at year-end
Scope 1 & 2 GHG | third party | members and 82% |
and 19% compared | assurance | independent |
to base year 2019 | members |
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1. Based on operational and under construction capacities. Includes Masdar generation capacity. Excludes 1GW captive capacity in Oman. 2. Board approved 0.7 fils per share for Q1 2024
TAQA a key driver of the energy transition in Abu Dhabi System
A deliberate shift towards cleaner energy sources
Planned power generation
structure in Abu Dhabi system
Installed generation capacity by | Energy mix across EWEC |
type across EWEC network | network |
Nuclear
-
Base load for Abu
Dhabi's power generation - TAQA provides Transmission & Distribution connectivity
- TAQA does not own the Barakah Nuclear Energy plant
Solar
- Intermittent power supply source
- TAQA has a key stake in all solar plants
Gas
- TAQA has a key stake in all Gas plants
100% | 94% | 100% | ||
90% | 90% | |||
80% | 80% | |||
70% | 68% | 70% | ||
64% | ||||
60% | 60% | |||
50% | 50% | |||
40% | 40% | |||
30% | 19% | 21% | 30% | |
20% | 20% | |||
15% | 13% | |||
10% | 6% | 10% | ||
0% | 0% | 0% | ||
Nuclear | Solar | Gas | ||
2019 | 2023 | 2030F |
100% | |||
62% | |||
51% | |||
32% | 32% | ||
17% | |||
6% | |||
0% | 0% | ||
Nuclear | Solar | Gas | |
2019 | 2023 | 2030F |
Source: EWEC
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Well-articulated strategy to become a low carbon power and water champion focused on optimization and growth
MISSION |
To be a low carbon power and water champion |
VISION
PURPOSE
STRATEGIC PILLARS
To provide the clean power and water that governments, businesses and consumers need for a sustainable and successful life
Powering a thriving future by efficiently providing sustainable and reliable energy and water to unleash the unlimited potential of people and places
Optimization | Growth |
KEY THEMES
Create an integrated and efficient utility company
Partner with the government to establish optimal regulatory system
Enhance security of supply to maintain demand growth in UAE and internationally
Expand product portfolio
Become a sustainable leader and decarbonization partner in the UAE
ENABLERS
Capability Building
Develop people capabilities for
sustainable growth
Financial discipline
Ensure financial stewardship
ESG
Become the UAE's ESG champion
sustainably delivering on our corporate
strategy and objectives
Innovation & Digitization
Enable optimization of existing business and ability to innovate for growth in new business models
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Breakdown of TAQA's power generation capacity
Share of clean energy increasing in portfolio
Gross capacity (GW)
45.0
16.0
24.122.4
3.4
12.6 | 29.0 | ||||
20.8 | |||||
9.8 | 1.6 | ||||
TAQA | Masdar | Elimination | TAQA + | ||
(joint project) | Masdar |
Current Portfolio (Operating + U/C)
Operational Under construction
Net capacity (GW)
18.7 | ||||
14.3 | 4.3 | |||
1.3 | ||||
13.0 | 4.4 | 14.4 | ||
3.0 | ||||
1.4 | ||||
TAQA | Masdar | TAQA + Masdar | ||
(TAQA Share) |
Current Portfolio (Operating + U/C)
Operational Under construction
Technology mix (gross capacity)
Geothermal Other
Coal 4.2% 2.0% 5.1%
Wind
13.5%
Clean
energy at
Thermal
~52% of42.5% portfolio
Solar
32.7%
Technology mix
(net capacity)
Geothermal Other
Wind 0.6% 1.1%
6.9%
Coal
11.0%
Clean | |
energy at | |
~31% of | |
Solar | portfolio |
Thermal | |
21.9% | |
58.5% | |
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Refreshed 2030 Power & Water Capacity Growth Targets
Significant upward revision reflecting stronger ambitions
Gross generation | Increasing share of | ||||||||
capacity (GW)* | Renewable Energy | ||||||||
Conventional | |||||||||
Renewable | |||||||||
3X | |||||||||
70% | 30% | 33% | 67% | ||||||
50 | 150 | ||||||||
Previous 2030 target | Refreshed 2030 | Previous 2030 | Refreshed 2030 | ||||||
target | target mix | target mix | |||||||
*7.4GW gross thermal capacity assumed to be | |||||||||
retired by 2030 |
Revised targets follow the successful integration of Masdar's renewable business
- Original targets set as part of 2021 growth strategy
-
TAQA became Masdar's largest shareholder in December
2022 with a 43% stake
Capex/investment plans: AED75 billion to be spent until 2030 to deliver the announced targets
- Includes power and water capacity expansion as well as previously committed capex of AED40 billion between 2021- 2023 on T&D regulated assets
- Over 80% of the total spend aimed at energy transition activities; AED 50 billion eligible for sustainable finance (as per EU taxonomy)
Water generation capacity (MIGD)
Conventional
Reverse Osmosis
1,250 | 1,300 |
34% | |
61% | |
39%35% | 66% |
Existing Capacity | 2030 target |
(as of Q1 '24) |
Net generation capacity (GW)∗
Conventional | |||||
Renewable | 50 | ||||
50% | |||||
18.7 | |||||
50% | |||||
69% | |||||
31% | |||||
Existing Capacity | 2030 target | ||||
(as of Q1 '24) |
*4.6GW net thermal capacity assumed to be
retired by 2030
Breakdown of AED 35bn
Generation CAPEX
4%
55%41%
Investment in Masdar
Water (TAQA) | Power (TAQA) |
Also considering expansion of Transmission & Distribution business outside of the UAE through inorganic and organic opportunities
Establishing growth targets for water generation capacity
- By 2030, two-thirds of water generation capacity will be based on highly efficient reverse osmosis (RO) technology
- Sustaining O&G production capacity across Canada, while decommissioning certain assets in the North Sea
- Commitment to maintain standalone investment grade rating
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Cash flow stability entrenched in TAQA's business model
T&D
GENERATION
Building blocks of Maximum Allowed Revenue (MAR):
RoI on Regulated | Incentive | |
Asset Base (RAB) | BST + Opex | |
structure | ||
+ Depreciation | ||
• Regulatory Control 2 (RC2) increases real WACC from 4.6% to 4.9% for
- Entire domestic and international generation fleet operates under long-term take or pay contracts with highly credible off-takers
- Compensation composed of Capacity Payment and Variable
Payment
- Capacity Payment is dependent on availability (rather than off-take) and includes recovery of capital and return on capital
- In addition to compensation for variable operating costs, Variable Payment includes recovery of fuel
2023-2026
• Annual nominal RoI on RAB: WACC + previous year's CPI
cost on a pass-through basis in select markets.
Q1 2024 Revenue breakdown | Q1 2024 EBITDA breakdown |
15% | 16% |
21% | 51% |
65% | 33% |
Contracted + regulated: | Contracted + regulated: | |
c.86% of Revenue | Regulated Contracted Other | c.84% of Adj. EBITDA |
- Contracted: Local and international power generation assets
- Regulated: Transmission & Distribution companies (licensed activities), Sustainable Water Solutions
- Other: Oil & Gas, unregulated transmission activities
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Disclaimer
TAQA - Abu Dhabi National Energy Company PJSC published this content on 19 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 June 2024 09:51:47 UTC.