The Dubai Electricity and Water Authority recorded a rise in second-quarter revenue on rising demand for water, electricity and cooling services in Dubai, despite a softer quarterly net income that was dragged lower by higher financing costs.
Net profit attributable to the shareholders of the company for the three-month period to the end of June dropped by 20 per cent on an annual basis to Dh1.93 billion ($525.9 million), Dewa said on Thursday in a filing to the Dubai Financial Market, where its shares are traded.
Revenue for the reporting period rose 4.1 per cent year on year to Dh7.29 billion. Finance costs for the April-June period climbed to about Dh515 million, from Dh110.48 million recorded a year earlier, Dewa said.
For the first six months of the year, Dewa's net income fell to Dh2.67 billion, from Dh3.14 billion from a year earlier.
First-half revenue rose 5.4 per cent to Dh12.7 billion, driven by an increase in demand for electricity, water and cooling services, as well as a rise in revenue of Dewa's other assets.
By the end of the first half, the company’s net cash from operating activities increased by a record Dh837million to Dh5.4 billion, a year-on-year increase of more than 18 per cent.
“Dewa's continued focus on smart project delivery, innovation and accelerating digital transformation have bolstered our top line results and our operating cash flow performance through the first six months of 2023,” said Saeed Al Tayer, managing director and chief executive of Dewa.
“We are committed to advancing strategic priorities of sustainability focused smart growth, enhanced customer happiness, globally leading operational excellence and attractive capital returns for our shareholders.”
The utility, which listed as a public company on the DFM in April last year, raising $6.1 billion in an oversubscribed offering, said its first-half net income was largely impacted by an increase in net finance costs and depreciation.
Net finance costs for the half-yearly period climbed by Dh262 million as UAE's benchmark lending rate Eibor rose amid rising interest rates during the past 12 months. Depreciation increased by Dh190 million due to new independent power projects that added to Dewa's generation capacity, the company said.
Revenue growth in the first half of this year for electricity, water and cooling increased by 5.7 per cent, 3.8 per cent and 4.9 per cent respectively. Dewa's other assets grew revenue by 7.8 per cent over the six-month period.
Demand for water, electricity and cooling services in Dubai is rising amid the emirate's economic resurgence.
Dubai’s economy grew 2.8 per cent on an annual basis in the first quarter of this year to Dh111.3 billion, extending the “robust momentum of growth” achieved in 2022, when gross domestic product expanded by 4.4 per cent.
Dubai's growth outpaces the seasonally adjusted output growth of 1.6 per cent for Organisation for Economic Cooperation and Development countries. The EU grew by 1.1 per cent in the first quarter, while the US economy grew by 1.8 per cent, the Dubai Media Office said earlier this week.
Dubai's non-oil private sector continued to record strong gains in July, boosted by new order growth.
The emirate's seasonally adjusted S&P Global purchasing managers' index reading eased to 55.7 in July, from 56.9 in June, well above the neutral 50 threshold.
The introduction of Dubai Economic Agenda D33 that aims to double the size of the economy over the coming decade, as well as rising population of the emirate, also bode well for the electricity and water consumption demand.
The total number of electricity accounts in Dubai jumped 5.5 per cent year on year to 1.14 million in first six months of the year amid demand surge, Dewa said earlier this month.
Dewa said demand for power in the April-June period reached 14.3 terawatt-hours compared to 14 TWh for the same period in 2022. Gross heat rate for power was 8,230 BTU per kilowatt-hour, which was a 4.2 per cent improvement on an annual basis, “reflecting higher operational efficiency resulting from the company’s targeted sustainability and environmental efforts”.
Demand for water in the second quarter reached 35.3 billion imperial gallons, representing a 4.6 per cent increase.
The utility at the end of June was serving serving more than 1.18 million customer accounts, representing an increase of 14,998 customers during the three-month period.
Dewa said the company’s installed generation capacity reached 14.9 gigawatts, with renewable energy accounting for 2.4 gigawatts of the capacity.
The company added 300 megawatts of green capacity during the second quarter of 2023 alone, it said.
Dewa is at the heart of Dubai’s energy transition plans under Dubai Clean Energy Strategy 2050 and its Dubai Net Zero Emissions Strategy 2050.
It is overseeing projects including Mohammed bin Rashid Al Maktoum Solar Park, that is able to generate 2,327MW of capacity, and now accounts for more than 15 per cent of the emirate's energy production capacity.
The mega-project is planned to have a total capacity of 5,000MW by 2030, officials said earlier this year.