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Saudi Electricity profit falls 27% as funding costs rise 

Saudi electricity Reuters/Daniel Becerril
The utility provider reported a 22.8% decline year on year in net profit to SAR10.34 billion in the first nine months of 2023

Saudi Electricity Company (SEC) reported a net profit after zakat and tax of SAR4.02 billion ($1.07 billion) in the second quarter of 2023, a decline of 27 percent year on year.

Revenue stood at SAR19.72 billion in the three months to June 2023, up 1.63 percent from SAR19.40 billion in Q2 2022, the utility provider said in a statement published on the Saudi stock exchange.

The lower earnings were driven by higher financing costs primarily due to the rising interest rates globally impacting capital projects.

Operations and maintenance costs rose due to business growth, intensive maintenance programmes ahead of the summer, and the introduction of new projects into operations.

Operating revenues rose, despite electricity sales falling, following the implementation of the intensive consumption tariff.

SEC’s net profit after zakat and tax declined 36 percent to SAR4.49 billion in the first half of 2023, from SAR7.02 billion a year ago.

Revenue rose by 0.5 percent to SAR33.09 billion during the first six months compared to SAR32.93 billion a year ago.

Shareholders in May approved a 7 percent cash dividend, or SAR 2.91 billion, for 2022.

The General Authority for Statistics (GSTAT) last month reported that 86 percent of Saudi respondents to a survey said they were rationalising the energy used by electrical appliances in their household.

The survey also found that the share of households willing to spend money to replace old appliances with modern, energy efficient alternatives had decreased slightly from 57.6 percent in 2021 to 56.4 percent in 2022.

The share of households interested in using solar energy to power their homes amounted to 53.1 percent. The GSTAT results found that 98.4 percent of Saudi homes use the public network to power their homes, 1.1 percent use a private network and just 0.4 percent use solar energy.