Saudi Electricity posts solid H1 results; revenue hits $10bn
RIYADH, August 8, 2024
The Saudi Electricity Company (SEC) continued its strong financial performance in the first half and second quarter of the year with its revenues climbing 15.5% year-on-year to hit SAR38.2 billion ($10 billion), while its net profit for the period surged 16.6% to SAR5.2 billion ($1.4 billion).
For the second quarter, SEC said the positive trend persisted throughout the three-month period with a 13.5% revenue jump hitting SAR22.4 billion and a 8.2% rise in net profit soaring to SAR4.3 billion over last year.
SEC's improved financial performance in H1 and Q2 2024 was driven by increased regulatory returns due to higher regulated weighted average cost of capital and a growing regulated asset base, coupled with rising electricity demand.
Additionally, lower finance costs, reduced provisions for receivables, and higher other income contributed to the positive results, it stated.
While operating and maintenance costs increased due to business expansion and higher loads, improved resource management partially offset this. Excluding costs of ongoing construction contracts for clients, which are newly recognized in the current year, overall operating efficiency increased, it added.
To support future growth and enhance service quality, SEC said it had invested SAR25.1 billion in capital projects during H1 2024 (including SAR14.5 billion in Q2 2024), a 62.5% y-o-y increase. The company also secured nearly SAR18.5 billion in financing since the beginning of 2024.
In May, Fitch Ratings elevated SEC’s credit rating from A to A+ with a stable outlook, acknowledging the company's strengthened financial and strategic standing.
This upgrade aligns SEC's creditworthiness with the Kingdom's sovereign rating as assessed by all major global credit rating agencies: Fitch (A+, Stable), Moody's (A1, Positive), and Standard & Poor's (A, Stable).
On the solid performance, CEO Engineer Khaled Al Gnoon said: "The positive financial and operating performance during the first half reflects the company’s continued progress towards achieving financial sustainability. The company has grown its business and operating asset base and has succeeded in improving resource management efficiency while effectively controlling operating expenses."
Al Gnoon pointed out that SEC was successfully implementing its growth plans by making significant investments to support the network expansion and development, diversify the energy mix, and meet the accelerating demand for electricity.
"The company is also making positive strides in enhancing its technical and operational capabilities. in alignment with the Kingdom’s Vision 2030 aiming to ensure energy supply security, efficiency, quality, and reliability of electricity services while elevating sustainability profile within the company and the sector, aligning with the national sustainable development goals," he added.-TradeArabia News Service
