Saudi Electricity Company Achieves 18% Increase In Net Profit For Q3 2024 Amid Revenue Growth

The Saudi Electricity Company (SEC) has reported notable financial growth for the third quarter and the first nine months of 2024. In Q3, SEC's revenues rose by 19% year on year to SAR28.3 billion, while net profit increased by 18% to SAR6.9 billion. Over the nine-month period, revenues reached SAR66.6 billion, marking a 17% rise, with net profit also up by 17%, totalling SAR12.1 billion.

SEC Acting CEO Eng. Khalid AlGhamdi stated: "The positive financial and operational performance during the third quarter and the nine-month period of 2024 reflects the growth of the company’s business and its operating asset base, alongside ongoing improvements in resource management effectiveness and operating expenses efficiency."

The company's improved financial performance in Q3 2024 is largely due to increased revenue recognition driven by a higher regulated weighted average cost of capital (WACC). Growth in the regulated asset base and electric power production revenues also contributed significantly. Additionally, there was sustained growth in the subscriber base.

New revenue streams emerged from development projects focused on constructing substations and transmission lines. These factors were crucial in supporting SEC's financial performance improvement over the first nine months of 2024 compared to last year.

Enhanced resource management helped control operations and maintenance expenses despite business expansion. This was achieved through improved efficiency in operating costs. In July 2024, Standard & Poor’s upgraded SEC's credit rating outlook from stable to positive, resulting in an A rating with a positive outlook.

The company’s credit ratings from Moody’s and Fitch are A1 with a positive outlook and A+ with a stable outlook, respectively. These ratings reflect SEC's strong financial position aligned with Saudi Arabia's sovereign rating across major international agencies.

Commitment to Sustainability

SEC is actively pursuing sustainability advancements to enhance operational efficiency while reducing environmental impacts. This aligns with sector trends and objectives to improve electrical services quality. In August 2024, SEC announced a significant increase in its Environmental, Social, and Governance (ESG) rating for the year.

The ESG rating rose by 43%, from 35 to 50 according to Standard & Poor’s "Corporate Sustainability Assessment." This annual evaluation provides a comprehensive assessment of corporate sustainability efforts.

Localisation Efforts

In line with Saudi Vision 2030 goals, SEC is committed to increasing local content and localising industry within energy supplies. At the Energy Localization Forum, SEC signed 46 localisation agreements valued at over SAR54.7 billion.

These agreements have specific local content targets aimed at enhancing supply chain sustainability. In 2023, SEC surpassed its local content classification target for 2025 by achieving over 63.38%.

Awards and Recognition

SEC received two corporate social responsibility awards for 2024: the Gold Category Award for outstanding contributions and the Best Practices Award in the energy sector from the Ministry of Human Resources and Social Development.

The awards acknowledge SEC's commitment to responsible practices towards society and the environment through its social responsibility programs focused on health, environmental protection, and economic prosperity.

SEC remains dedicated to future growth investments aimed at improving service efficiency, quality, and reliability. Capital investments increased by 35% year on year in the first nine months of 2024, reaching SAR39.7 billion.

With inputs from SPA