Q1 2017 Financial Results Analyst Presentation Abu Dhabi National - PowerPoint PPT Presentation

Q1 2017 Financial Results Analyst Presentation Abu Dhabi National Energy Company PJSC (TAQA) Abu Dhabi, 11 May 2017

Disclaimer 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 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herein is preliminary as of the date hereof, supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered. Any investor who subsequently acquires any securities must rely solely on any final offering memorandum published in connection with such securities, on the basis of which alone purchases of or subscription for any securities may be made. In addition, investors should pay particular attention to any sections of any such final offering memorandum describing any risk factors. 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. The merits or suitability of any securities to any investor's particular situation should be independently determined by such investor. Any such determination 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 or made, 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 use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. In particular, these materials are not intended for distribution, except (i) to accredited investors as defined under applicable Canadian securities laws, (ii) within the United States 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 compliance with Regulation S. These materials contain, or may be deemed to contain, "forward-looking statements" (as defined under applicable Canadian securities laws and in the U.S. Private Securities Litigation Reform Act of 1995). By their nature, forward-looking statements involve risks and uncertainties because they relate to events 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 risks should be carefully considered by prospective investors before they make any investment decisions. 5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 1

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 Oil prices ($/bbl) Crude oil 60 - Realised oil price up 62% vs Q1 2016 50 - Supported by OPEC cuts announced in Q4 2016 40 - Pressured by stronger US production growth, full inventories, positive supply outlook in other 30 2016 2017 countries Brent WTI Natural gas Gas prices $/mmbtu - Realised gas prices up 57% vs Q1 2016 6 - Winter price dip due to warmer weather in 2017 4 - New US export capabilities shrinking inventories 2 0 2016 2017 Henry Hub AECO NBP 5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 4

Power & Water Stable production and financial performance Power generation (GWh)  Continued strong operational performance - Total power generation 16,413 GWh 17,022 16,413 15,898 - 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 Q1 2015 Q1 2016 Q1 2017  Stable financials reflect contracted nature of Water desalination (MIG) business 59,430 57,216 56,584 - Revenues at AED 2.7 billion - EBITDA of AED 1.5 billion Q1 2015 Q1 2016 Q1 2017 5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 5

Oil & Gas Sustained efficiencies from transformation Average production (mboe/d)  Production at 132,200 barrels of oil equivalent per day 157.9 153.7 - Production declined 14% impacted by the 70% oil & gas 132.2 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 Q1 2015 Q1 2016 Q1 2017 production declines Unit operating costs ($/boe)  Positive Net Backs 27.8 23.3  Revenues increase 17% to AED 1.5 billion; EBITDA up 22.25 81% to AED 839 million 8.5 7.6 7.24 2015 2016 Q1 2017 Europe North America 5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 6

Capital Expenditure Increased investment focused on core operations Capex (AED million)  Q1 2017 Capex up 69% to AED 458 million following several years of deep cuts 458  2017 forecast at AED 1.8 billion - Increase in capex in line with commodity price 271 recovery, to protect and sustain the value of global assets - Follows several years of deep cuts - Self-funded by cash generated by the business Q1 2016 Q1 2017 5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 7

Financial performance Relatively stable cash flows despite commodity price volatility EBITDA (AED billion) Revenues (AED billion) Q1 2017 Q1 2017 4.14 2.43 Q1 2016 3.91 Q1 2016 1.97 Net Income (AED billion)* Free cash flow** (AED billion) Q1 2017 0.08 Q1 2017 2.03 Q1 2016 -0.61 Q1 2016 1.50 *Profit attributable to common shareholders **Free Cash Flows represents Operating less Investing Cash Flows 5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 8

Liquidity and key ratios Strong liquidity and proactive management of maturities Debt Maturity Profile ($ million)*  Robust liquidity position: - Cash and cash equivalents: AED 3.7 billion 3,000 - Undrawn credit facilities: AED 9.1 billion 2,000  Staggered and manageable maturity profile: 1,000 - March 2017 maturity refinanced ahead of time in 0 October 2016 17 18 19 20 21 22 23 24 26 36 Bonds Drawn RCF Undrawn RCF JPY Loan - Evaluating options for Oct 2017 maturity ($500m) *as at 31 March 2017 Key ratios  Improving ratios - Recovering ratios following improved financial Q1 2016 Q1 2017 performance Net debt / net capital 87% 85% EBITDA/Interest 2.0x 2.6x Net Debt/EBITDA* 7.8x 7.5x 5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 9

Concluding remarks  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 5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 10

Appendix

Operational Data – Power & Water KPIs UAE domestic plants Q1 2016 Q1 2017 12,619 Power generation (GWh) 12,336 56,584 Water desalination (MIG) 57,216 87.1 Technical availability (%) 84.7 International plants Q1 2016 Q1 2017 4,403 Power generation (GWh) 4,077 87.0 Technical availability (%) 82.7 5/10/2017 Abu Dhabi National Energy Company PJSC (TAQA) 13