Alkhorayef Water CEO expects SAR 480 mln revenue in H2 2022, SAR 4 bln contracts in pipeline

CEO Rami Mousilli

Rami Moussilli, CEO of Alkhorayef Water and Power Technologies Co. (AWPT), expects revenue to rise to SAR 480 million in the second half of 2022, bringing the full-year estimated revenue 47% higher year-on-year (YoY) to SAR 840 million.

The company’s profit growth was driven by the implementation of the contracts awarded in H2 2021, such as the King Abdullah bin Abdulaziz Project for Zamzam Water in Makkah, and the upgrade of King Khalid International Airport’s sewage network, Moussilli said in a phone call with Argaam.

The utility is currently working on more than 75 projects in parallel across 11 regions in the Kingdom. It has also signed several contracts, including those of water quality improvement, the operation and maintenance of Zamzam water project and the construction of sewage networks in Taif.

The Taif project is still under preparation and designing as scheduled, the CEO said, expecting the implementation phase to begin in the third quarter of the year.

Alkhorayef Water has over SAR 4 billion worth of contracts in the pipeline. Revenue is expected to reach SAR 1.25 billion in 2023, an increase of 50-60% compared to 2022, he added. The company’s backlog of SAR 3.6 billion was valued at nearly SAR 3.6 billion by the end of H1 2022, implying an over threefold increase in the last 12 months, as the company signed new deals worth SAR 3 billion.

Backlog contracts are predicted to deliver about SAR 1.4 billion revenue in 2023. The company eyes new contracts in the projects services, and the operation and maintenance services sectors to maintain its revenue and profit growth.

He added that the water and integrated water solutions segments have witnessed growth since early 2022, on new awards such as the rain and torrential water networks contracts, the ground water level reduction networks contracts in the South and East of Jeddah, as well as the supply of water and sewage services across the Kingdom.

The company has a solid balance sheet, with a debt/equity ratio of 1.4x. Alkhorayef Water does not mainly depend on debt to finance its working capital, Moussilli elaborated, adding that its total debts reached SAR 479 million as of June 30, 2022.

The utility usually seeks financing only in the first months of preparation for new projects, after which dependence on finance becomes lower as the company starts to collect projects’ proceeds.

The company holds the biggest market share in the Kingdom’s operation and maintenance sector, and projects services in the water and sewage sector. Alkhorayef Water is looking forward to competing for the SAR 108 billion water projects revealed recently by the National Water Co. (NWC), and the long-term operation and maintenance contracts, which last from 10-15 years, of NWC’s sewage treatment plants across the Kingdom.

The company targets a package of privatization projects, including the program of independent water transmission pipelines, and the independent sewage plants program, which is offered by Saudi Water Partnership Co. (SWPC).

The utility provider always seeks new growth solutions either by entering new supplementary sectors in line with its qualifications or by geographical expansions. Acquisitions will always remain an option to deliver the company’s growth strategy, he concluded.

AWPT reported a net profit after Zakat and tax of SAR 51.6 million for the first half of 2022, a 6% rise from SAR 48.7 million a year earlier.