Abu Dhabi National Energy Company

1. Company Overview & Earnings Context

Abu Dhabi National Energy Company PJSC (TAQA) is an ADX-listed diversified utilities and energy company with operations spanning power and water generation, transmission and distribution, sustainable water solutions, and international oil & gas activities.

TAQA delivered higher profitability in H1 2026 despite slightly lower revenue. Group revenue declined to AED 27.52 billion from AED 28.24 billion, while EBITDA increased to AED 11.00 billion and net income attributable to TAQA shareholders rose to AED 4.07 billion from AED 3.71 billion.

2. Financial Performance Snapshot

• Revenue: AED 27.52 Billion (-2.6% YoY)

• EBITDA: AED 11.00 Billion (+7.7% YoY)

• Gross Profit: AED 6.42 Billion (+3.3% YoY)

• Profit Before Tax: AED 4.97 Billion (+17.3% YoY)

• Net Profit: AED 4.24 Billion (+7.8% YoY)

• Net Income Attributable to TAQA Shareholders: AED 4.07 Billion (+9.7% YoY)

• EPS: AED 0.04, vs. AED 0.03

• Free Cash Flow: AED 4.55 Billion, vs. AED 7.01 billion

The key theme was therefore stronger profitability despite lower revenue, supported by higher contributions from regulated utilities, generation assets, associates and joint ventures.

3. Business & Operational Performance

TAQA's largest revenue contributor remained Distribution, generating AED 17.73 billion of external revenue, followed by Generation at AED 5.70 billion, Oil & Gas at AED 2.15 billion, Water Solutions at AED 1.30 billion and Transmission at AED 644 million.

At the EBITDA level, Generation increased to AED 3.84 billion from AED 3.71 billion, while Transmission rose strongly to AED 2.78 billion from AED 2.44 billion. Distribution EBITDA increased to AED 2.20 billion, while Oil & Gas improved to AED 1.19 billion. Water Solutions EBITDA declined slightly to AED 749 million.

Operationally, Generation commercial availability remained stable at 93.6%, Transmission network availability stood at 98.4%, and Water Solutions asset availability improved to 95.8% from 94.4%. Oil & Gas production averaged 92.5 mboe/day, broadly in line with 93.5 mboe/day in H1 2025.

4. Key Performance Drivers

Revenue declined mainly because of lower pass-through revenues at TAQA Distribution, extension works at the Shuweihat 1 Power Plant and lower Oil & Gas production following planned decommissioning of UK North Sea assets.

Despite this, EBITDA increased 7.7% to AED 11.0 billion, reflecting higher contributions from associates and joint ventures and the stable earnings profile of TAQA's regulated utilities businesses.

Share of results from associates and joint ventures improved dramatically to AED 508 million from an AED 89 million loss, providing an important boost to earnings. Generation's share of associate and JV results alone increased to AED 495 million from AED 27 million.

Finance costs increased to AED 1.63 billion from AED 1.52 billion, while tax expense increased significantly to AED 733 million from AED 326 million. Even after these pressures, profit attributable to TAQA shareholders increased nearly 10% YoY.

5. Balance Sheet, Investment & Cash Flow

TAQA ended June 2026 with:

• Total Assets: AED 226.27 Billion

• Total Equity: AED 107.65 Billion

• Total Liabilities: AED 118.62 Billion

• Property, Plant & Equipment: AED 143.32 Billion

• Cash & Short-Term Deposits: AED 9.00 Billion

• Total Debt: AED 68.27 Billion

• Net Debt-to-Capital Ratio: 36%

• Total Available Liquidity: AED 21.57 Billion

Capital expenditure increased sharply to AED 7.24 billion from AED 5.24 billion, reflecting accelerated investment across power, water and transmission infrastructure. This higher investment was the main reason free cash flow declined to AED 4.55 billion from AED 7.01 billion.

Operating cash generation nevertheless remained very strong, with AED 10.53 billion generated from operating activities. TAQA invested AED 5.98 billion and paid AED 3.37 billion in dividends to shareholders during H1. Cash and cash equivalents increased to AED 8.995 billion at period end.

6. Investor Takeaway

TAQA delivered a strong H1 2026 earnings performance, with EBITDA increasing 7.7% and shareholder net income rising 9.7% to AED 4.07 billion despite a 2.6% decline in revenue. The results underline the resilience of its regulated utility businesses and improving contribution from Generation, Transmission and associates.

The Group is also investing aggressively for future growth. Capital expenditure rose 38.3% to AED 7.24 billion, while strategic projects included the 2.6 GW Taweelah C power project, the 27-year TA'ZIZ utilities agreement, Ras Al Khaimah's major wastewater treatment project and an AED 3.2 billion green bond refinancing for Al Dhafra Solar PV.

One important corporate development is ownership. AD Power increased its stake to 98.12% and issued a mandatory acquisition notice for the remaining 1.88% of TAQA shares. Completion remains subject to regulatory and corporate approvals. TAQA's planned acquisition of 100% of GS Inima, a global water treatment and desalination company, also remained subject to completion requirements at the reporting date.

The independent auditor issued an unmodified review conclusion, stating that nothing had come to its attention indicating that the H1 2026 financial statements were not prepared, in all material respects, in accordance with IAS 34. Going into H2 2026, the key areas to monitor are regulated utility earnings, Generation and Transmission growth, capital expenditure, free cash flow, debt levels, execution of major infrastructure projects, the GS Inima acquisition and progress on AD Power's mandatory acquisition of the remaining TAQA shares.