DEWA Receives Moody’s Upgrade To A3 Rating With Stable Outlook, Signaling Economic Strength In Dubai

Dubai Electricity and Water Authority (DEWA) received a notable upgrade in its long-term issuer rating from Moody's, shifting from Baa2 to A3, accompanied by a stable outlook. This adjustment in DEWA's credit rating is attributed to several key factors, including the positive economic trends in Dubai and DEWA's significant position in the emirate's power and water sectors.

Saeed Mohammed Al Tayer, MD and CEO of DEWA, expressed his views on the upgrade, stating, "The rating upgrade reflects favourable economic and fiscal developments in the emirate of Dubai, which will translate into improved financial and operating results for the company." He highlighted DEWA's solid asset foundation, minimal leverage, and strong operating cash flow as pivotal elements ensuring a steady dividend for shareholders.

Reflecting on its financial strategies, DEWA has outlined a dividend policy promising a minimum annual dividend of AED6.2 billion for the first five years starting from October 2022. Dividends are scheduled for distribution semi-annually, in April and October.

As per the recent financial calendar, DEWA successfully distributed AED3.1 billion as a dividend for the first half (H1) of 2023 to its shareholders, following a record date of 18th October 2023. The same amount was also disbursed for the second half (H2) of 2023 on 26th April 2024, with the record date set for 15th April 2024. Looking forward, DEWA plans to continue its dividend payments, with the next disbursement scheduled for H1 2024 in October 2024.

This upgrade by Moody's not only underscores DEWA's robust financial health but also its strategic importance in Dubai's infrastructure. It reflects on DEWA's ability to maintain strong credit metrics, a tariff structure that promotes healthy cash flow generation, and a strong liquidity profile. This move is expected to bolster investor confidence and highlight DEWA's critical role in supporting the economic and fiscal growth within Dubai.