Acwa Power nine-month net profit slides due to one-off charge

The company listed on Tadawul in October, offering about 81.2 million shares

Acwa Power's financial results after its IPO provide 'a solid basis for growth', said chief executive Paddy Padmananathan. Leslie Pableo for The National

Riyadh-based utility developer Acwa Power's nine-month net profit slid nearly 53 per cent because of a one-off charge it incurred and a flat operating income.

Net profit in the nine-month period fell to 434 million Saudi riyals ($115.7m), from 922.8m riyals during the same period last year, the company said in a regulatory filing to the Tadawul stock exchange, where its shares are traded. The drop was due to a one-time charge of 280m Saudi riyals in the third quarter of the year from the grant and incentive of its initial public offering plan.

The company's operating income for the first nine months of the year remained flat at 1.7 billion riyals, supported by its operations and maintenance business.

Acwa Power's financial results after its IPO provide "a solid basis for growth", Paddy Padmanathan, chief executive of the company, said.

"Our results for the third quarter demonstrate that we are on track towards achieving our business and financial targets as set forth in our prospectus for the fiscal year 2021."

In October, Acwa Power offered about 81.2 million shares in one of the biggest listings in the energy space after Saudi Aramco's record IPO on the Tadawul in 2019, which raised a record $29.4bn.

The developer is at the forefront of Saudi Arabia's efforts to diversify its energy sector with greener investments. The world's largest oil exporter plans to add gas and renewables capacity equating to one million barrels of oil a day by 2030.

Saudi Arabia's sovereign wealth fund, the Public Investment Fund, is the biggest shareholder in the company with a 50 per cent stake.

Acwa Power has seven other stakeholders, including the Saudi Public Pension Agency.

The energy company swung to a loss of 21.8m riyals in the third quarter, compared to a profit of 541m riyals during the same period a year ago.

The company's portfolio at the end of the nine-month financial period comprised 65 power and desalination projects in 13 countries with an overall project cost of $67bn. Projects developed by Acwa Power, such as Al Dur and Hassyan independent power producer developments, began operations in 2021.

The company also reached financial close on its Sudair, Sirdarya and Redstone projects, which contributed to higher operating income. Acwa Power said the gains were offset by charges related to "recognition of employee long-term incentive plan".

Accelerated depreciation of two oil-fired assets, as well as lower share in net results of equity-accounted investees, also contributed to the charges.

Acwa Power is developing a $5bn green hydrogen project, along with Saudi Aramco and Air Products, in the kingdom's futuristic city of Neom, one of the biggest such projects in the Middle East.