Saudi Electricity H1 2023 profit after Mudaraba falls 78% to SAR 697.5 mln; Q2 at SAR 2.10 bln

Saudi Electricity Co. (SEC) reported a slump of 78% in H1 2023 net profit to SAR 697.5 million after deducting the payment of Mudaraba coupon, compared to SAR 3.22 billion in the year-ago period.

SEC’s profit before the payment of Mudaraba coupon dropped to SAR 4.49 billion in the six-month period, from SAR 7.02 billion in H1 2022.

The profit dip was attributed to higher finance costs (FC) amid increased interest rates. In addition, the company incurred higher financing costs due to the additional funding obtained during the current year to finance the company's capital projects.

SEC also recorded higher operating and maintenance expenses, mainly due to business growth, intensive maintenance programs ahead of the summer season and the commencement of operations at new projects, compared to H1 2022.

The utility reported an absence of income from discontinued operations in the current period compared to the first half of 2022. By contrast, operating revenue and other income increased.

The second-quarter net profit fell 41% to SAR 2.10 billion from SAR 3.59 billion in Q2 2022 on higher FC amid interest rate hikes as well as operating and maintenance expenses.

The utility turned to profit from a net loss of SAR 1.40 billion in Q1 2023 due to the sales seasonality.

Total shareholders’ equity, no minority interest – after Mudaraba, reached SAR 86.86 billion as of June 30, 2023, compared to SAR 84.78 billion a year earlier.

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