Riyadh-based utility developer Acwa Power's net profit slid 17.5 per cent in 2021, mainly owing to its recognition of some share-based payments related to its initial public offering and an impairment loss.
Net profit after zakat and tax for the 12-month period fell to 743.9 million Saudi riyals ($198.2m), the company said in a regulatory filing on Wednesday to the Tadawul stock exchange, where its shares are traded.
The drop in profit was due to the company's “recognition of share-based payments expense related to its IPO; … the long-term incentive plan expense; an increase in zakat and tax charge; a net reduction in share in net results of the equity accounted investees largely on account of accelerated depreciation in two oil-fired assets in Saudi Arabia; and an impairment loss”, the company said.
The company's operating income for the year rose 12.5 per cent to 2.1 billion riyals.
“With a landmark IPO; an inaugural Sukuk issuance; several capital recycling transactions including refinancing of project finance facilities and solid steps in the decarbonisation of our fleet, including the addition of five new large-scale renewable projects into our portfolio of assets in advanced development, 2021 marked another inflection point in Acwa Power’s business,” said Paddy Padmanathan, chief executive and vice chairman of Acwa Power.
Acwa Power raised $1.2bn from its IPO last year, making it 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 plays a pivotal role in diversifying Saudi Arabia's energy sources through its investments in renewable projects. The world's largest oil exporter plans to add gas and renewables capacity equating to one million barrels of oil per 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.
In 2021, the Riyadh utility developer achieved financial closes of five projects in Saudi Arabia, South Africa and Uzbekistan, including 1.3bn senior debt facilities for the Red Sea multi-utilities project in the kingdom.
“Looking ahead, we have a solid and diversified cash flow base with steady projected growth on account of a visible pipeline of power and water projects, as well as a large hydrogen market that Acwa Power is well placed to convert into a fair share of business growth in the coming years,” said Kashif Rana, chief financial officer and acting chief portfolio management officer of Acwa Power.
The company has 64 projects in operation, construction or advanced development in 12 countries. These projects have a value of 251.7bn riyals, with capacity to generate 42.7 gigawatts of electricity and produce 6.4 million cubic metres per day of desalinated water.
