Saudi Electricity 9M 2023 profit down 40% to SAR 4.62 bln after Mudaraba; Q3 at SAR 3.9 bln

07/11/2023 Argaam Exclusive

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Saudi Electricity Co. (SEC) reported a 40% drop in net profit after deducting the payment of Mudaraba coupon to SAR 4.6 billion in the first nine months of 2023 from SAR 7.7 billion a year earlier.

Financials (M)

Item	9m 2022	9m 2023	Change‬
Revenues	55,682.62	56,895.83	2.2 %
Gross Income	16,679.55	15,558.21	(6.7 %)
Operating Income	14,758.48	15,001.70	1.6 %
Net Income before deducting Mudaraba Instrument profit	13,394.75	10,340.51	(22.8 %)
Net Income after deducting Mudaraba Instrument profit	7,664.46	4,610.22	(39.8 %)
Average Shares	4,166.59	4,166.59	0.0 %
EPS before deducting Mudaraba Instrument profit (Riyals)	3.21	2.48	(22.7 %)
EPS after deducting Mudaraba Instrument profit (Riyals)	1.84	1.11	(39.8 %)

Before Mudaraba coupon, the nine-month bottom line fell to SAR 10.3 billion from SAR 13.4 billion in the corresponding period of 2022.

The nine-month performance was hurt by higher financing costs (FCs), mainly due to the prevailing high interest rates globally and the additional funding obtained during the current year to finance the company's capital projects.

Higher operations and maintenance expenses also weighed on SEC’s nine-month profit due to business growth and increased planned maintenance. In addition, new projects come on stream, compared to the same period last year.

SEC also reported increased depreciation of operation and maintenance assets as a result of the company’s asset growth over the last twelve-month period.

On the other hand, operating revenue rose reflecting growth in power demand, continued growth in subscriber base, and higher transmission system revenue.

Current Quarter Comparison (M)

Compared With The

Item	Q3 2022	Q3 2023	Change‬
Revenues	22,749.62	23,799.09	4.6 %
Gross Income	7,496.39	7,743.56	3.3 %
Operating Income	6,913.51	7,912.39	14.4 %
Net Income before deducting Mudaraba Instrument profit	6,375.23	5,843.84	(8.3 %)
Net Income	4,444.14	3,912.76	(12.0 %)
Average Shares	4,166.59	4,166.59	0.0 %
EPS before deducting Mudaraba Instrument profit (Riyals)	1.53	1.40	(8.3 %)
EPS (Riyals)	1.07	0.94	(12.0 %)

Item	Q2 2023	Q3 2023	Change‬
Revenues	19,717.53	23,799.09	20.7 %
Gross Income	6,054.87	7,743.56	27.9 %
Operating Income	5,686.00	7,912.39	39.2 %
Net Income before deducting Mudaraba Instrument profit	4,016.92	5,843.84	45.5 %
Net Income	2,106.83	3,912.76	85.7 %
Average Shares	4,166.59	4,166.59	-
EPS before deducting Mudaraba Instrument profit (Riyals)	0.96	1.40	45.5 %
EPS (Riyals)	0.51	0.94	85.7 %

The third-quarter net earnings declined 12% year-on-year (YoY) to SAR 3.9 billion on increased FCs amid higher global interest rates.

Net profit leapt by 86.4% from SAR 2.10 billion in Q2 2023 due to seasonal sales of power.

Total shareholders’ equity, no minority interest after Mudaraba coupon, rose to SAR 93 billion as of Sept. 30, 2023, from SAR 91.13 billion in the prior-year period.

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