Financial Results : SEC profit after Mudaraba up 25% to SAR 870M in H1 2024; Q2 at SAR 2.15B

SEC profit after Mudaraba up 25% to SAR 870M in H1 2024; Q2 at SAR 2.15B

07/08/2024 Argaam Exclusive

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Saudi Electricity Co. (SEC) posted a net profit rise to SAR 870 million (after deducting the payments of Mudaraba coupon) from SAR 697 million in the year-earlier period.



Financials (M)

Item 6m 2023 6m 2024 Change‬
Revenues 33,096.74 38,237.83 15.5 %
Gross Income 7,814.65 7,307.88 (6.5 %)
Operating Income 7,089.31 6,771.42 (4.5 %)
Net Income before deducting Mudaraba Instrument profit 4,496.67 5,241.79 16.6 %
Net Income after deducting Mudaraba Instrument profit 697.46 869.79 24.7 %
Average Shares 4,166.59 4,166.59 -
EPS before deducting Mudaraba Instrument profit (Riyals) 1.08 1.26 16.6 %
EPS after deducting Mudaraba Instrument profit (Riyals) 0.17 0.21 24.7 %

Before the Mudaraba coupon, SEC’s net profit increased to SAR 5.24 billion in the six-month period, from SAR 4.49 billion in H1 2023.

 

The higher profit was attributed to a rise in the revenue required to be recognized during the current quarter, driven by an increase in the regulated weighted average cost of capital (Regulatory WACC) and a growing regulated asset base (RAB), coupled with increased demand for electric power and continued growth in subscribers’ base.

 

SEC generated new revenue from development projects to construct substations and transmission lines for the company’s customers.

 

The increase in net income during the current period compared to the corresponding period of 2023, is mainly attributed to a rise in WACC and RAB, coupled with higher electric power generation revenue and continued growth in subscriber base

 

SEC also reported a decline in finance costs, a lower provision for receivables from electricity consumption reflecting improved collections and sales seasonality, and an increase in other revenue due to a one-off settlement with a supplier.



Current Quarter Comparison (M)

Compared With The
Item Q2 2023 Q2 2024 Change‬
Revenues 19,717.53 22,379.34 13.5 %
Gross Income 6,054.87 5,167.43 (14.7 %)
Operating Income 5,686.00 5,022.70 (11.7 %)
Net Income before deducting Mudaraba Instrument profit 4,016.92 4,344.61 8.2 %
Net Income 2,106.83 2,158.61 2.5 %
Average Shares 4,166.59 4,166.59 -
EPS before deducting Mudaraba Instrument profit (Riyals) 0.96 1.04 8.2 %
EPS (Riyals) 0.51 0.52 2.5 %

On the other hand, operating and maintenance costs went up. Similarly, the company recorded an increase in general and administrative expenses.

 

The second-quarter net earnings grew 3% to SAR 2.15 billion, compared to SAR 2.10 billion in Q2 2023, thanks to a rise in the revenue required to be recognized during the current quarter, driven by an increase in the regulated WACC and RAB, coupled with increased demand for electric power and continued growth in subscriber base.

 

Net earnings more than doubled from SAR 897 million in Q1 2024.

 

Total shareholders’ equity, no minority interest and after the Mudaraba coupon, reached SAR 8.682 billion as of June 30, 2024, compared to SAR 8.687 billion a year before.

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