Saudi Electricity turns to SAR 9.166 bln net profit after deducting Mudaraba in 9M 2021

Saudi Electricity Co. turned to a net profit of SAR 14.897 billion, before deduction of Mudaraba distribution, in the first nine months of 2021, compared to a net loss of SAR 1.1094 billion in the same period last year.

By deducting dividends from the Mudaraba instrument, amounting to SAR 5.731 billion, the company achieved a net profit of SAR 9.166 billion (SAR 2.2/share) by the end of the first nine months of 2021, compared to a net loss of SAR 1.1094 billion (SAR 0.27/share) in year-ago period.

The company attributed the profit to the implementation of regulatory and financial reforms approved for the electricity sector in November 2020.

It includes cancellation of the government fee as of Jan. 1, as opposed to the same period last prior year, which has a government fee of SAR 11.86 billion; adoption of a Regulatory Asset Based (RAB) model to regulate the company’s revenue, effective from 2021; and lower finance costs on the income statement due to drop in debt levels following the conversion of the government loans as part of the Mudaraba signed in November 2020.

This was partly offset by lower other income due to decrease in government grants amortization and higher accounts receivable provisions, reflecting rise in revenue base retained by the company after the government fee cancellation.

In Q3 2021, the utility provider reported a net profit of SAR 5.448 billion, rising 147.6% year-on-year (YoY).

On a sequential basis, the company posted 39.1% rise in Q3 2021 net profit on seasonality of sales.

Total shareholders’ equity, excluding minority interest, stood at SAR 256.26 billion in 9M 2021, compared to SAR 71.164 billion in the same period a year ago.

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