Saudi Electricity profits increase by 16.6% in H1, 2024

The Saudi Electricity Company (SEC) continued to achieve an increase in its financial performance in the first half and second quarter of 2024. The company achieved a growth in its revenues in the first half of 2024 by 15.5% to reach 38.2 billion Saudi riyals, and net profit by 16.6% to reach 5.2 billion Saudi riyals compared to the same period of the previous year, while revenues in the second quarter of 2024 increased by 13.5% to reach 22.4 billion Saudi riyals, and net profit increased by 8.2% to reach 4.3 billion Saudi riyals compared to the same quarter of the previous year. The improvement in the company’s financial performance in the first half and second quarter of 2024 compared to the same periods of the previous year is mainly due to the increase in the regulatory weighted return rate on the cost of capital (regulatory return), the growth of the regulated asset base, the increase in demand for electricity service, in addition to the decrease in financing charges, the decrease in the provision for receivables for electricity consumers, and the increase in other revenues. These items were partially offset by an increase in operating and maintenance expenses, which reflects business growth, the increase in operating assets, and the increase in loads, as they include the costs of new revenues for construction contracts under implementation for customers. The improvement in the effectiveness of resource management and the efficiency of operating expenses led to the rationalization of controllable operating and maintenance costs, which increased slightly compared to business growth, the increase in operating assets, and the increase in loads. This excludes the costs of construction contracts under implementation for customers that were introduced during the current year. Saudi Electricity Company continued to pump investments for future growth to improve the efficiency, quality and reliability of service, as capital project investments increased by 62.5% in the first half of 2024 to reach SAR 25.1 billion (including SAR 14.5 billion during the second quarter of 2024) compared to the same period of the previous year. The company also succeeded in completing several prominent financing deals with a total value of approximately SAR 18.5 billion since the beginning of 2024, which supports continued investment in future growth. In May 2024, the company’s credit rating was raised by Fitch to (A+, stable outlook) from (A, stable outlook), which reflects the improvement in the company’s financial and strategic position. The company’s credit rating is currently similar to the sovereign credit rating of the Kingdom by all international credit rating agencies Fitch, Moody’s and Standard & Poor’s, which comes at (A+, stable outlook, A1, positive outlook, A, stable outlook) respectively. For his part, Eng. Khalid bin Hamad Al-Qunun, CEO of the Saudi Electricity Company, commented on the company’s financial results for the first half of 2024: “The positive financial and operational performance during the first half of 2024 proves that the company is on the right track to achieve financial sustainability, as the company continued to grow its business and operational asset base and succeeded in improving the effectiveness of resource management and managing efficiently controlled operating expenses.” Al-Qunun added, “The company is successfully implementing its growth plans by pumping huge investments to keep pace with the requirements of network growth and development, diversifying the energy mix, and keeping pace with the rapid growth in demand for electricity. It is also making positive progress in improving its technical and operational capabilities, in line with the Kingdom’s Vision 2030, with the aim of achieving energy supply security, efficiency, quality and reliability of electricity service, while at the same time improving the sustainability landscape in the company and the sector as a whole and aligning with national sustainable development goals.” The company explained that the first half of the current year was characterized by a significant growth in demand for electricity services compared to the same period last year, as the peak load of the network increased by 9.5% to reach 72.9 gigawatts, and electricity consumption increased by 6.1% to reach 146 terawatt hours, and the company added more than 165,000 new subscribers. Unprecedented historical peak loads were also covered in Makkah, Madinah and the holy sites during the Hajj season 1445 AH, as the company harnessed all its capabilities to serve the Two Holy Mosques and the holy sites to enhance the comfort of the guests of God. The company worked to enhance the network with generation and expansion capabilities and connect it to the network with overhead and ground lines, as it successfully completed the operation of strategic electricity connection projects, the most important of which is the project to connect the central region to the southern region, passing through the main transformer stations in Al-Kharj, Al-Aflaj, Wadi Al-Dawasir, and Bisha, with a length of 830 circular km, as well as the operation of the Arar-Rafha line project with a length of 660 circular km. As well as adding a 291 MW generating unit to the 14th generation station.