Dewa expects to post a profit of about $2bn in 2022

The Dubai Electricity and Water Authority expects to record an annual profit of Dh7.3 billion ($1.98bn) in 2022, following the listing of the utility earlier this month. Dewa is set to announce its first-quarter results in May and has recorded a “strong performance ” so far this year, Saeed Al Tayer, managing director and chief executive of Dewa, told CNBC Arabia on Friday. “Dewa has strong cash flows and will not need to take on debt … We have no issues for the next five years and we will not seek loans, thanks to a well-studied business plan,” he said. “Our projects are ongoing. We continue to develop these projects and the infrastructure according to the highest international standards.” The utility, which listed on the Dubai Financial Market on April 12, raised Dh22.41bn from its initial public offering amid strong investor demand. The IPO was the largest in the Middle East and Europe since Saudi Aramco's listing in 2019. The utility's shares were trading at Dh2.85 on Friday, up from its listing price of Dh2.48. Dewa currently has a market value of about $39bn and is the largest on the DFM. The utility, which posted an increase of about 75 per cent in its 2021 profit to about Dh7bn, has benefitted from growing demand for electricity in Dubai as the economy continues to make a strong recovery from the coronavirus-induced slowdown. Revenue reached Dh23.8bn and the value of assets at the end of 2021 climbed to Dh169.5bn. As of December 31, Dewa had a total electricity generation capacity of 13,417 megawatts and a daily water capacity of 490 million imperial gallons through eight majority-owned and operated plants. It has projects valued at about Dh86bn that are due to be commissioned in the next five years to meet the increasing demand for electricity and water in the emirate, Dewa said last year. Business will grow as Dubai's population is expected to grow to 5.8 million by 2040, from 3.5 million currently. Energy demand rose 11 per cent last year, nearly triple the company's estimates. Along with catering to the rising demand for water and energy, Dewa's projects also support Dubai's urban and economic plans, Mr Al Tayer said on Friday. “We also continue to raise the efficiency and effectiveness of production stations, transport and production networks to provide services according to the best standards,” he said. Dewa is also playing a key role in executing Dubai's Clean Energy Strategy 2050, which aims to ensure that 75 per cent of the emirate's energy is generated by clean sources by 2050. The utility is currently developing the Mohammed bin Rashid Al Maktoum Solar Park , the largest single-site solar project in the world, which will have a capacity of 5,000MW upon completion in 2030, with a total investment of Dh50bn. Dewa is also undertaking a Dh50 million hydrogen pilot project with Germany's Siemens Energy and is expected to release its strategy on hydrogen this year. Earlier this week, Dewa said that its EV Green Charger initiative has provided more than 8,800 megawatt-hours — equivalent to the annual energy capture of some wind turbines — to its users. That has allowed owners of electric vehicles on Dubai's roads to travel more than 58 million kilometres since 2015 while cutting refuelling costs by about three quarters, as more users opt for more eco-friendly modes of transport. Overall, the generation capacity of clean energy is currently about 11.4 per cent of the total average, Mr Al Tayer said. Asked if Dewa's IPO success will encourage a listing of its affiliated units, Mr Al Tayer said, “secondary offerings of the companies affiliated with us will be announced if they are approved”. Earlier this week, Mr Al Tayer said the IPO of Dubai-based district cooling provider Emirates Central Cooling Systems Corporation — better known as Empower — will happen “soon” but not in the current quarter. “We will announce the date at the right time,” he said, without elaborating. Plans to list the company, which is a joint venture between Dewa and Dubai's Tecom Investments Group, were first announced in December last year.