Acwa Power’s quarterly profit rises 6% on higher revenue

Riyadh-based energy company reports $110.5 million in profit during the period

Acwa Power windmills on the outskirts of Tangier, Morocco. Reuters

Saudi Arabia's private utility Acwa Power reported a more than 6 per cent annual rise in its second-quarter profit on the back of higher revenue as it continues to develop new projects to boost its portfolio.

Net profit after zakat for the three months to the end of June climbed to 414.4 million Saudi riyals ($110.5 million), the company said in a filing on Thursday to the Tadawul stock exchange, where its shares are traded.

Revenue during the period surged more than 9 per cent annually to 1.4 billion riyals, and operating profit rose more than 8 per cent to about 730 million riyals.

The company’s net profit rose for the quarter due to “higher operating income before impairment … resulting from higher contribution from existing projects on account of plants that experienced outages in the prior period and contribution from new projects”, it said.

Lower zakat and tax charges, mainly because of deferred tax credit, also helped the company to increase its profit for the period.

“These increases in net profit were partially offset by higher finance charges, mainly due to additional debt including the sukuk tranche two issuance by the company and higher market rates,” it added.

Acwa Power, backed by the Public Investment Fund, operates in 12 countries across the Middle East, Africa, Central and South-east Asia. The company's portfolio comprises 77 projects in operation, advanced development or construction with an investment value of $78.2 billion and the capacity to generate 50.4 gigawatts of power and manage 6.8 million cubic metres of desalinated water per day.

The company has been boosting its investments to expand its portfolio globally.

Last month, it signed a preliminary agreement with Egypt's New and Renewable Energy Authority to allocate land for a 10-gigawatt wind project in the North African country.

The agreement comes after the Riyadh-listed utility signed an initial pact in November last year to build the project, expected to be one of the largest wind farms in the region.

It is also teaming up with the Ministry of Energy of Kazakhstan and Samruk-Kazyna, the country’s investment development fund and sovereign wealth fund, for the development of a one-gigawatt wind energy and battery storage project in Kazakhstan with a total investment of $1.5 billion.

Acwa also announced the closure of the $6.3 billion Neom green hydrogen project’s financing in the kingdom's $500 billion futuristic city in May.

“Acwa Power’s diversified business model continues to present solid future growth with more projects coming online,” Abdulhameed Al Muhaidib, chief financial officer of Acwa Power, said. “It is also encouraging to see the progressive operational stability following some unusually extended plant outages of last year.”

The company’s first-half profit rose 26 per cent year-on-year to 684 million riyals as revenue grew 12 per cent to 2.7 billion riyals. Operating income also increased by about 6 per cent to 1.28 billion riyals.

Acwa Power also paid a dividend of 607 million riyals for 2022 to its shareholders in July.

“Our parent cash flow and balance sheet continue to remain healthy to support our immediate and visible growth pipeline,” Mr Al Muhaidib said.