TAQA steadies profit as network spending accelerates

Abu Dhabi National Energy Company reported first-quarter revenue of AED13.7 billion, or about $3.73 billion, as stable utility earnings helped keep shareholder net income unchanged at AED2.1 billion while the group lifted investment across power, water and transmission assets.

The Abu Dhabi-listed company, known as TAQA, said earnings before interest, taxes, depreciation and amortisation rose to AED5.5 billion from AED5.3 billion a year earlier, supported by higher contributions from joint ventures and associates and the predictable earnings profile of its regulated utilities businesses. The figures underline the company’s role as one of Abu Dhabi’s core infrastructure platforms at a time when the emirate is expanding electricity, water and clean-energy capacity to serve industrial growth, population expansion and energy transition targets.

Capital expenditure climbed 45.5 per cent year on year to AED3.2 billion, reflecting faster deployment of funds into power generation, water infrastructure and transmission networks. Free cash flow stood at AED4.8 billion, broadly matching the year-earlier level, as stronger operating cash flow was offset by heavier project spending.

TAQA’s first-quarter performance showed a familiar pattern for large regulated utilities in the Gulf: steady profits, rising infrastructure commitments and limited exposure to short-term swings in energy prices compared with upstream oil and gas producers. The group’s business model is anchored in contracted generation, regulated networks, water desalination and international assets, giving it relatively stable cash flows even as borrowing costs, construction inflation and energy market volatility remain important risks.

Shareholders approved an updated dividend policy for 2026 to 2028, preserving fixed and variable components and keeping the company’s payout story central to its appeal among income-focused investors. The board approved a first-quarter interim dividend of 0.8 fils per share, equivalent to AED899 million. The policy signals continued confidence in cash generation, although the pace of capital spending means management will have to balance shareholder returns with the funding needs of a larger project pipeline.

Governance changes also took effect during the quarter, with shareholders electing a new board and Jassem Mohammed Bu Ataba Al Zaabi appointed chairman. Jasim Husain Thabet, group chief executive officer and managing director, said TAQA had maintained stable operations and delivered resilient results despite external pressures, adding that the company was investing with discipline in growth at home and abroad.

The latest numbers follow a year in which TAQA posted AED54.8 billion in revenue and AED7.5 billion in net income, with annual capital expenditure rising sharply to AED14.5 billion. That investment drive included domestic power, water and grid projects, including the 1 gigawatt Al Dhafra thermal power plant, alongside broader work to strengthen infrastructure tied to demand growth and the integration of cleaner energy sources.

International expansion remains a major part of the strategy. TAQA is progressing with its planned acquisition of GS Inima, a Spain-headquartered water treatment and desalination company, in a deal valued at about $1.2 billion. The transaction, expected to close in 2026 subject to approvals and conditions, would deepen TAQA’s water platform and give it broader exposure to markets including Europe, Latin America and the Middle East.

The company is also advancing projects in Morocco and Saudi Arabia while supporting Masdar’s growth as its largest shareholder. That position gives TAQA a strategic link to one of Abu Dhabi’s most visible clean-energy vehicles, at a time when utilities across the Gulf are trying to align conventional infrastructure needs with decarbonisation targets.

For investors, the quarter’s key message was stability rather than rapid earnings expansion. Net income held firm, EBITDA improved modestly and cash flow remained strong, while the heavier capital programme pointed to a business moving through an investment cycle. The challenge will be to convert that spending into regulated asset growth and future returns without weakening balance-sheet flexibility.