Saudi Electricity Company's Net Profit Jumps 16.6% In First Half Of 2024

The Saudi Electricity Company (SEC) reported robust financial results for the first half and second quarter of 2024. Revenues rose by 15.5% year-over-year to SAR38.2 billion for H1 2024, while net profit increased by 16.6% to SAR5.2 billion. In Q2 2024, revenues grew by 13.5% to SAR22.4 billion, and net profit climbed by 8.2% to SAR4.3 billion compared to the same period in 2023.

Electricity demand surged in the first half of the year, with peak load rising by 9.5% to 72.9 GW and overall consumption increasing by 6.1% to 146 TWh compared to last year. SEC welcomed over 165,000 new customers during this period. To meet this demand, especially during Hajj in Makkah and Madinah, SEC maximised resource allocation for optimal pilgrim comfort.

SEC invested SAR25.1 billion in capital projects during H1 2024, including SAR14.5 billion in Q2 alone, marking a 62.5% increase year-over-year. The company also secured nearly SAR18.5 billion in financing since the beginning of the year.

The company's improved financial performance was driven by increased regulatory returns due to a higher regulated weighted average cost of capital and a growing regulated asset base, coupled with rising electricity demand. Lower finance costs, reduced provisions for receivables, and higher other income also contributed positively.

Despite increased operating and maintenance costs due to business expansion and higher loads, improved resource management partially offset these expenses. Excluding costs of ongoing construction contracts for clients newly recognised this year, overall operating efficiency increased.

Credit Rating Upgrade

In May 2024, Fitch Ratings upgraded SEC’s credit rating from A to A+ with a stable outlook, recognising the company's strengthened financial and strategic standing. This upgrade aligns SEC's creditworthiness with Saudi Arabia's sovereign rating as assessed by major global credit rating agencies: Fitch (A+, Stable), Moody's (A1, Positive), and Standard & Poor's (A, Stable).

CEO's Statement on Progress

SEC CEO Eng. Khaled Al-Gnoon stated: "The positive financial and operating performance during the first half of 2024 reflects the company’s continued progress towards achieving financial sustainability." He added that SEC has grown its business and operating asset base while improving resource management efficiency and controlling operating expenses effectively.

Al-Gnoon further noted: "SEC is successfully implementing its growth plans by making significant investments to support network expansion and development, diversify the energy mix, and meet accelerating electricity demand." He highlighted that these efforts align with Saudi Arabia’s Vision 2030 goals of ensuring energy supply security, efficiency, quality, reliability of electricity services, and enhancing sustainability within the company and sector.

Infrastructure Enhancements

The company fortified grid infrastructure through expanded generation capacity, new overhead and underground lines, and strategic interconnection projects. Notable projects included linking central and southern regions via an 830-kilometer line passing through Al-Kharj, Al-Aflaj, Wadi Al-Dawasir, and Bisha.

An additional interconnection between Arar and Rafha spanning 660 kilometers was completed along with a new generation unit at the Fourteenth Generation Station adding 291 MW capacity.

The Saudi Electricity Company's strong financial performance in H1 and Q2 of 2024 underscores its commitment to growth while maintaining operational efficiency amidst rising demand.

With inputs from SPA