Saudi Electricity announces its financial results for the fiscal year 2021

The Saudi Electricity Company announced today its financial results for 2021, demonstrating a financial performance that reflected the implementation of structural, regulatory and financial reforms approved in November 2020, which had a positive impact on the sector and the company. Furthermore, the results reflected improving demand for electric power, driven by the general recovery in economic and social activities from the COVID-19 pandemic.

The key highlights of the financial results for the year 2021 are as follows:

• Operating revenues: 69.3 BSAR, compared to 68.7 BSAR for the previous year.
• Gross profit: 20.5 BSAR, compared to 8.3 BSAR for the previous year.
• Operating income: 17.6 BSAR, compared to 7.7 BSAR for the previous year.
• Net profit was 14.4 BSAR, compared to 3.02 BSAR for the previous year.
• The adjusted net profit (net profit attributable to common shares after deducting profit attributable to the Mudaraba instrument of 7.7 BSAR) for 2021 amounted to 6.7 BSAR compared to 2.1 BSAR for the prior year.
• Basic and diluted earnings per share for 2021 were 1.62 SAR, compared to 0.50 SAR for previous year.
• Total shareholders’ equity at the end of 2021 (equity excluding the Mudaraba instrument) was 83.7 BSAR, compared to 79.9 BSAR for the previous year, representing an increase of 4.8 %.
• The company’s board of directors recommended a cash dividends distribution for 2021 of 70 Halala per share, at a total amount of 2.9 BSAR.

Saudi Electricity attributed the change in net income in 2021 compared to the previous year primarily to the regulatory, structural, and financial reforms of the electricity sector that the company continued to implement in 2021 as per which, 1) the government fees were abolished starting from January 1, 2021, resulting in lower overall operating costs, 2) adopting a regulatory asset based (RAB) Model to regulate the company’s revenue, effective from the fiscal year 2021, and as per which a balancing account estimated amount of 1.7 BSAR has been recognized by the company during 2021, 3) The decrease in finance charges on the income statement during 2021, primarily driven by lower overall debt levels following the conversion of the government loans as part of the Mudaraba Instrument signed in November 2020 which has been partly offset by lower other income due to decrease in government grants amortization. Furthermore, the company also indicated the positive impact of increased power sales driven by the recovery of demand from the effects of the Covid-19 pandemic during the same period of the previous year, particularly in the commercial, governmental, and industrial sectors. This in addition to higher electricity service connection fees, meter reading, maintenance and bills preparation fees and transmission system revenue, which were partly offset by higher variable costs associated with consumption growth, such as energy purchased, operating and maintenance costs, and higher depreciation during 2021 compared to previous year.

The growth pace in customer base during 2021 was higher, as the company delivered electric service to approximately 430 thousand new customers, distributed across all residential, commercial, industrial, agricultural, and government sectors, bringing the total number of customers to more than 10.5 million by the end of the year. Furthermore, 2021 marked the completion of an important achievement and a global record for the company and the Kingdom, where the company completed the installation and replacement of more than 10 million smart electric meters and activated the remote billing systems across all regions of the Kingdom.

In a statement regarding the results, Eng. Khaled Al-Gnoon, Acting CEO of SEC, said: “The improvement in the financial performance of the company enables the company to invest more to enhance the reliability and efficiency of the electricity system, particularly enhancing the reliability of the electricity transmission grid with the aim of raising generation efficiency, and enabling the production of electricity from renewable energy sources. This is in line with the objective of achieving the target energy mix for electricity production. Furthermore, our objectives include enhancing and automating the distribution grid. All these contribute to achieving the aspired goals in raising the quality and reliability of the electrical service provided to the end consumer, while also enabling greenhouse gases emissions reduction initiatives and contributing positively towards environmental sustainability.”

He concluded, “We are pleased that the financial, regulatory, and structural reforms have positively reflected on the sector’s financial sustainability and have led to an improvement in the company’s financial position, further enabling us to contribute to the achievement of the power sector’s goals. We are currently investing in network modernization, digitization, and automation, and we are moving forward with digital transformation and automation of services provided electronically, in addition to keeping up with the increasing demand for electrical service and the necessary network expansion. The company’s announced results would not have been possible without unwavering support of our prudent government.”