Saudi Electricity profit falls 8% on rising finance costs

Reuters/Daniel Becerril

Saudi Electricity Company, 75 percent-owned by the sovereign Public Investment Fund, reported a net profit of SAR5.84 billion ($1.55 billion) in the third quarter of 2023, down 8.33 percent year on year.

The profit decline was driven by higher finance costs, mainly due to high global interest rates and the additional funding needed to finance the company’s capital projects.

In addition, SEC booked zakat provisions quarterly starting in 2023. Zakat is an Islamic finance term referring to the obligation that an individual has to donate a certain proportion of wealth each year to charitable causes.

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Basic and diluted earnings per share for the third quarter of 2023 was SAR 0.94, down from SAR 1.07 for the same period in the previous year.

Revenue for the third quarter rose 4.6 percent year on year to SAR23.79 billion.

The utility provider reported a 22.8 percent decline in net profit to SAR10.34 billion in the first nine months of 2023, compared to SAR13.39 billion a year earlier.

The company reported higher operating revenue, reflecting growth in power demand, continued growth in the subscriber base, and higher transmission system revenue.

Revenue during the period rose 2.18 percent year on year to SAR56.89 billion.

During the first nine months of 2023, the company’s investments increased by 52 percent, exceeding SAR29.5 billion, with SAR14 billion invested in the third quarter.

“Our investment strategy aims to inject a total investment of SAR500 billion by 2030 to provide electrical services to our subscribers,” said CEO Khaled Al Gnoon.