SEC Q1 earnings in-line with estimate, says SICO

Saudi Electricity Co (SEC) reported better-than-expected results with a net loss of SAR 1.2 billion in Q1 2018, compared to SICO Investment Bank's estimate of SAR 1.5 billion.

The electric utility firm’s revenue at SAR 11.4 billion was broadly in-line with the investment bank's estimate. However, "state-fee" of SAR 2.6 billion was higher than SICO's estimate of SAR 2.2 billion.

"The offsetting impact to the ‘state-fee’ came from higher electricity connection tariffs," it said.

Operating loss at SAR 643 million beat the bank’s estimate of SAR 1.1 billion, which potentially includes one-offs as the numbers imply zero general and admin expenses.

Total power demand was down 3 percent during the first quarter, with residential consumption down 12 percent year-on-year (YoY). Capex fell 46 percent YoY.

"Barring the annual dividend of SAR 0.70 per share (yielding just 3.1 percent), we see little value in holding the stock," SICO added.

The investment bank revised the company rating to "neutral", reducing target price to SAR 22 per share.