Saudi Electricity turns to net profit of SAR 1.689 bln in Q1 2021

Saudi Electricity Co. (SEC) reported a net profit after Zakat and tax of SAR 1.689 billion for the first quarter of 2021, against a net loss of SAR 2.441 billion in the year-ago period.

The positive performance was spurred by the regulatory and financial reforms approved for the electricity sector in November 2020, under which the government fee was cancelled as of January 1, 2021, a Regulatory Asset Based (RAB) Model was adopted to regulate the company’s revenue, effective from the fiscal year 2021. Accordingly, the balancing account estimated amount is being disbursed to the company on a quarterly basis. This also reflected on higher other operating revenue in the current quarter.

Moreover, financing costs decreased, due to lower overall debt levels following the conversion of the government loans as part of the Mudaraba Instrument signed in November 2020.

Moreover, operating revenues increased on higher power sales. However, the aforementioned items were partly offset by higher accounts receivable provisions reflecting higher revenue base retained by the company in the current quarter after the government fee cancellation.

When compared to Q4 2020, the company swung to a net profit after Zakat and tax of SAR 4.1 billion against a net loss of SAR 59.1 million.

Shareholders’ equity, excluding minority interest, more than tripled to SAR 249.705 billion by the end of Q1 2021, compared to SAR 70.682 billion in the year-ago period.