Saudi Electricity 2023 profit after Mudaraba falls 65% to SAR 2.6B; Q4 loss at SAR 2B

Saudi Electricity Co. (SEC) reported a net profit of SAR 2.6 billion in 2023 after deducting the Mudaraba coupon, compared to SAR 7.5 billion a year earlier.

Before deducting the Mudaraba coupon, 2023 earnings reached SAR 10.3 billion, down from SAR 15.1 billion in 2022.

The profit decline was due to higher operating and maintenance costs on growing business and operating assets, as well as increasing maintenance programs and higher

loads. This is in addition to costs from development projects to construct substations and transmission lines for SEC customers.

The utility provider also cited increasing financing costs mainly due to the high-interest rate environment prevailing globally, in addition to the increase in financing costs attributable to additional funding obtained during the current year to finance the company's capital projects.

SEC also booked non-recurring expense items, which reflected lower net other income and expenses.

However, the aforementioned items were partially offset by higher operating revenues on growing demand for electric power, continued growth in subscriber base, higher transmission system revenues, and a rise in revenue from Dawiyat Co. The company also cited revenue from development projects to construct substations and transmission lines for SEC customers.

In Q4 2023, SEC widened its loss to SAR 2 billion from SAR 190.6 million a year earlier.

The utility provider turned to a net loss in Q4 2023 from a profit of SAR 3.92 million in Q3 2023.

Total shareholders’ equity, before Mudaraba instrument distributions, reached SAR 88.4 billion as of Dec. 31, 2023, compared to SAR 89.1 billion a year before.

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