Saudi Electricity Company (SEC)continued to deliver strong financial performance in the first half and second quarter of 2024. SEC reported a 15.5% increase in its revenues for H1 2024, reaching SAR 38.2 billion, with net profit rising by 16.6% to SAR 5.2 billion compared to the same period last year. In Q2 2024, revenues increased by 13.5% to SAR 22.4 billion, and net profit grew by 8.2% to SAR 4.3 billion compared to the same quarter of the previous year.
The improvement in SEC's financial performance for H1 and Q2 2024, compared to the same periods of the previous year, is primarily attributed to increased regulatory returns due to a higher regulated weighted average cost of capital (Regulatory return) and a growing regulated asset base (RAB), alongside higher demand for electricity. These as well as a decline in finance costs, lower provision for receivables from electricity consumption and increase in other revenues. These positive factors were partially offset by higher operating and maintenance costs, reflecting business growth, increased operating assets, and higher loads. The improvement in resource management and operating costs efficiency has led to better optimized controllable operations and maintenance costs which were marginally increased compared to a wider increase in revenue, business growth, increased operating assets, and higher loads. This is excluding the costs of ongoing construction contracts for clients, which are newly recognized in the current year.
SEC continued its investment in future growth to enhance service efficiency, quality, and reliability. Capital project investments in H1 2024 rose by 62.5%, reaching SAR 25.1 billion (including SAR 14.5 billion in Q2 2024), compared to the same period last year. The company successfully completed several prominent financing deals, with a total value of nearly SAR 18.5 billion since the beginning of 2024, supporting ongoing investment in future growth.
In May 2024, Fitch Ratings upgraded SEC’s credit rating to (A+, Stable) from (A, Stable), reflecting improved financial and strategic position of the Company. Currently, the company’s credit rating is on par with the Kingdom’s sovereign credit rating by all major global credit rating agencies; Fitch (A+, Stable), Moody's (A1, Positive), and Standard & Poor's (A, Stable).
Eng. Khaled Al-Gnoon, CEO of SEC, commented on the company’s financial results for H1 2024: "The positive financial and operating performance during the first half of 2024 reflects the company’s continued progress towards achieving financial sustainability. The company has grown its business and operating asset base and has succeeded in improving resource management efficiency while effectively controlling operating expenses."
Al-Gnoon added: "SEC is successfully implementing its growth plans by making significant investments to support the network expansion and development, diversify the energy mix, and meet the accelerating demand for electricity. The company is also making positive strides in enhancing its technical and operational capabilities. in alignment with the Kingdom’s Vision 2030 aiming to ensure energy supply security, efficiency, quality, and reliability of electricity services while elevating sustainability profile within the company and the sector, aligning with the national sustainable development goals."
The company noted that the first half of this year witnessed significant growth in demand for electricity services compared to the same period last year, with peak load on the grid increasing by 9.5% to 72.9 GW, and electricity consumption rising by 6.1% to 146 TWh. The company added more than 165,000 new subscribers. It also covered unprecedented maximum peak loads in Makkah, Madinah, and the holy sites during Hajj season of 1445H, mobilizing all its resources to serve the Two Holy Mosques and the holy sites to enhance the comfort of the pilgrims. Furthermore, the Company strengthened the grid with additional generation capacities, expansions, and connections to the network with overhead and underground lines, successfully operating strategic interconnection projects, including the linkage between the central and southern regions, passing through the main substations in Al-Kharj, Al-Aflaj, Wadi Al-Dawasir, and Bisha, with a total length of 830 circular kilometres, as well as the Arar-Rafha interconnection line with a length of 660 circular kilometres. Additionally, a 291 MW generation unit was added at the Fourteenth Generation Station.