Al Mal bullish on UAE

The continuing slide of oil prices will not erode UAE’s energy sector revenues, Dubai’s leading investment bank affirmed yesterday. In its earnings preview, Al Mal Capital said the UAE energy sector will post « strong year-on-year (YoY) results » in the third quarter of 2008. Two prominent energy sector companies in the UAE will, in fact, register growth figures deep into two and three digits YoY, Al Mal said. Abu Dhabi National Energy Company’s (Taqa) revenue is, however, expected to dip marginally when compared on a quarter on quarter basis, the same report said. « We expect Taqa to report Dh4.4bn in revenues (up 78 per cent YoY) and Dh420m in net income (up 218 per cent YoY) in Q3, » the preview said. Taking a bullish position on Dana Gas, the report said the company performance will not only ameliorate in third quarter,but there are indications to suggest the company will fare much better in the fourth quarter. « For Q3, Dana could post Dh321m in gross revenues (up 16 per cent YoY) and Dh34m in net income (up 57 per cent YoY), » Al Mal said. « We expect Dana’s Egyptian volumes to grow slightly QoQ. We continue to expect Dana’s Kurdistan operations to start impacting numbers from Q4 onwards, » it said. The report calms down speculations that falling oil prices will dent revenues of UAE’s energy majors. Oil prices have continued to traverse a downward incline even after Opec’s recent emergency measure of cutting down production by 1.5 billion barrels a day. Spot Brent prices stood at $59.32 a barrel yesterday. The prices scrape a third of the $147 a barrel price tag oil had assumed three months ago. Al Mal’s forecasts are based on oil prices averaging at $70 a barrel and gas selling at $6 per million British thermal units. « We were never in the oil prices will reach $200 a barrel camp. With signs of recession in the West and a weakness in demand, we feel our new lower mid-cycle price estimates are more realistic, » the report said. Shashank Shekhar