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UAE’s Dana Gas second quarterly profit rises on lower tax expense

UAE's Dana gas shuffles board amid debt talks

Dana Gas Co, which has a $1 billion Islamic bond maturing in October, on Monday said its quarterly profit rose 46 percent helped mainly by lower income tax expenses.


August 13, 2012 4:19 by

Dana Gas Co, which has a $1 billion Islamic bond maturing in October, on Monday said its quarterly profit rose 46 percent helped mainly by lower income tax expenses.

Abu Dhabi-listed Dana, which has operations in the UAE, Egypt and Kurdistan, posted second-quarter profit of 181 million dirhams ($49.28 million), up from 124 million dirhams in the year-ago period, it said in a bourse statement.

Quarterly revenue fell 12 percent to 554 million dirhams from 627 million dirhams last year, hurt by lower hydrocarbon prices and a decline in production in Egypt, Dana said.

Two analysts forecast profit of 183 million dirhams and 151 million dirhams for the second quarter, in a Reuters poll.

Income tax expense for the quarter fell by nearly half to 51 million dirhams from 97 million dirhams a year ago, boosting profitability at the Sharjah-based energy firm.

Dana, which owns a 3-percent stake in Hungarian group MOL , provided no new update on upcoming Islamic bond maturity.

“Investors want to know how the company is going to repay its $1 billion sukuk that matures in a matter of weeks, and in that regard the company has provided no further information,” said Chavan Bhogaita, head of markets strategy department at National Bank of Abu Dhabi.

The natural gas producer appointed Blackstone Group and Deutsche Bank as advisers to help it weigh options for the outstanding $920 million on the convertible sukuk and said it was committed to finding a consensual solution.

Depending on the outcome of discussions, the company could become the first in the UAE to restructure a bond.

“In the not too distant future, the company is either going to have to face the music and sit at the negotiating table with investors, or come up with the cash with which to pay this debt,” Bhogaita said.

Dana started facing problems last year after anti-government protests in countries such as Egypt led to payment delays from government entities. It has also faced payment issues in Iraq’s Kurdistan region.

The company had cash balance of 601 million dirhams as of June 30, 2012, it said on Monday.

Dana shares fell 2.5 percent on the Abu Dhabi bourse Monday ahead of the results. The stock has dropped 11 percent year-to-date.

($1 = 3.6730 UAE dirhams)

(Reporting by Dinesh Nair and Mala Pancholia; Editing by Amran Abocar)


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