Saudi Electricity Earns SR1.5 bln during 1Q, down 10%

The net profit after zakat and tax for the Saudi Electricity Company declined to SR1.5 billion during the first quarter, compared to SR1.68 billion during the same quarter of the previous year, by 10%.

This came after Saudi Electricity announcement on Wednesday the consolidated preliminary financial results for the period ending on 31.03.2022 (three months).

The operational profit amounted to SR2.20 billion during the first quarter, compared to SR2.28 billion during the same quarter of the previous year, a decrease of 3%.

The gross profit amounted to SR2.6 billion during the first quarter, compared to SR2.9 billion during the same quarter of the previous year, down 10%.

Profits per share during the current period amounted to SR0.09, compared to SR0.05 during the same period of the previous year.

The reason of the increase (decrease) in the net profit during the current quarter compared to the same quarter of the last year is:

The decline in net income for the first quarter compared to the same prior year quarter is mainly due to the following:

1) Lower recognition of balancing account during current quarter of 399 MSAR compared to SR575 during same quarter last year, despite the increase in electricity sales and higher Transmission Usage of System.

2) Higher fuel, purchased power and operating & maintenance costs increased due to higher electricity demand.

3) Increase in financing cost offset by lower provision for doubtful debts.

The reason of the increase (decrease) in the net profit during the current quarter compared to the previous period of the current year is:

The reason for achieving a profit for the current quarter compared to a net loss for the previous quarter is due to the following:

1) Lower operating and maintenance costs, fuel costs and purchased power due to seasonality of electrical energy consumption.

2) The previous quarter included non-recurring provisions and expenses, and 3) Decline in finance costs partially offset by an increase in provision for doubtful debts.

Certain comparative figures have been reclassified to conform to the presentation in the current period.

Adjusted net loss for Q1 2022 “net loss attributable to common shares after deducting profit attributable to Mudaraba Instrument of SR1,889 amounted to SR372 compared to net losses of SR 200 for the same prior year period, Accordingly the basic and diluted loss per share reached to SR0.09 compared to SR0.05 of same period last year.

On12 May 2022, Saudi Electricity Company (the Company) received a letter (ref. no. 4464) from His Royal Highness, the Minister of Energy, Chairman of the Ministerial Committee for Restructuring Electricity Sector and Saudi Electricity Company, stating the approval of the models of the Energy Conversion Agreements, and Bulk Supply Agreement between Saudi Electricity Company and Saudi Power Procurement Company (SPPC). Currently the Company is in the process to complete all required procedures to activate the mentioned agreements which may entail a reclassification of some items in the Company’s future financial statements in relation to joint operations and the possibility of discontinuing the application of proportional consolidation of joint operations’ assets and liabilities.