2Q earnings season is in full swing, and we have a mixed bag of reports this morning from UAE’s Taqa and KSA’s Ma’aden and Tadweeer.

TAQA-

A mixed season for Taqa: Abu Dhabi National Energy Company (Taqa) reported a 17% y-o-y drop in net income in the second quarter of the year to AED 1.92 bn on the back of lower

energy prices and reduced production, its financial statements (pdf) to ADX showed. Its revenues were up 5% y-o-y for the three months ending in June to AED 13.7 bn.

A better 1H all in all: Taqa reported a whooping y-o-y net income of AED 13.5 bn in the first six half of the year from AED 4.3 bn in the corresponding period last year, according to the financial statement. The rise in net income during 1H was driven by a one-off gain of AED 10.8 bn recognized on the acquisition of a 5% shareholding in Adnoc Gas, its earnings release (pdf) showed on Monday. This was in part offset by a one-off AED 1.2 bn deferred tax liability associated with the introduction of corporate income tax from 1 January 2024 by the UAE. Its revenues were up 5.4% y-o-y in the first six months of the year to AED 26.8 bn. The growth in revenues during the period came on the back of higher pass-through bulk supply tariffs and transmission use of systems within the transmission and distribution segment.

Some highlights during the season: Taqa shed light on some of its achievements during the first half of the year, including a definitive agreement to acquire water solutions firm Sustainable Water Solutions Holding Company, according to its earnings release. It also announced during the second quarter the financial closing for the Mirfa 2 Reverse Osmosis Desalination Plant. The ambitious project will see Taqa taking a majority stake of 60% in the project company and a 40% stake in the project’s operation and maintenance company. It also announced with Adnoc a AED 8.8 bn strategic project which will help provide sustainable water for Adnoc’s onshore operations. Both parties will hold a 25.5% stake each in the project, which comprise a centralized seawater treatment facility and transportation network for Adnoc’s onshore operations.

And internationally: Taqa embarked on its first transmission and distribution investment overseas with a AED 113 mn investment for the ambitious Xlinks’ Morocco-UK Power Project. Xlinks will lay 3.8k km high-voltage direct current (HVDC) subsea cable to eventually transport 3.6 GW of renewable energy — nearly 8% of the the UK’s current requirements — from a 10.5 GW solar and wind farm in Morocco’s Guelmim-Oued Noun region to Britain’s power grid in Devon, it said earlier this year.

MA’ADEN-

A quarter to forget for Ma’aden: Saudi Arabian Mining Company Ma’aden reported a 91.3% y-o-y plunge in net income in the second quarter of the year to SAR 351 mn on the back of lower sales prices and higher expenditure, according to a disclosure to Tadawul. Its revenues during the three months ending in June dropped 41.3% y-o-y to SAR 7 bn.

1H was bumpy too: The state-owned mining company reported a 88% y-o-y fall in net income during the first half of the year to SAR 770.4 mn, the disclosure showed. Its revenues were down 27.8% y-o-y during the first six months of the year to SAR 15 bn.

What’s fuelling the drop? Ma’aden attributed the drop in net income in 2Q to lower average realized sales prices of all its products except gold, and higher general and administrative expenses including expected credit loss allowance by 40%. The decrease in the second quarter was partially offset by higher sales volumes of all products except ammonia, primary aluminum, and flat rolled products. The drop in net income during the first half of the year compared to the corresponding period last year was due to lower sales prices of all products except gold and higher cost of sales by 10% due to increased production costs coming from higher sales volumes which were partially offset by a decrease in raw material costs. The fall in net income was partially offset by higher sales volumes of all products except primary aluminum and flat rolled products and lower selling, marketing, and logistics expenses by 24%.

TADWEEER-

A solid 1H for KSA’s Tadweeer: Saudi Arabia’s National Environmental Recycling Co. (Tadweeer) reported a 19.8% y-o-y rise in net profit for 1H 2023 to SAR 10.14 mn on the back of an increase in operating income, according to financial results sent to Tadawul. The company’s revenues grew 34.6% y-o-y for the same period to SAR 257.9 mn.

Fueling the bottom line growth: Tadweeer attributed the growth in net profits after zakat and tax provisions to an almost 35% increase in sales from the corresponding period last year, which saw it rake in SAR 13.1 mn in operating income in 1H, the filing notes.