Dewa's first-quarter net profit jumps 19% as power consumption rises

Revenue for the reporting period climbed 15% as hospitality and commercial activities in Dubai continued to improve

Dewa listed its shares in April in one of the region's biggest IPOs. AFP

The Dubai Electricity and Water Authority reported a 19 per cent jump in first quarter net profit as revenue rose on increased power consumption in the emirate.

Net profit for the three-month period to the end of March climbed to Dh691 million ($188m), Dewa said in a regulatory filing on Friday to the Dubai Financial Market, where its shares are traded.

Revenue for the reporting period climbed an annual 15 per cent to Dh5.06 billion as a rise in hospitality and commercial activities in Dubai, underpinned by the easing of pandemic-related restrictions world-wide, contributed to robust demand growth.

“The strong first quarterly result is a testament to our resilient operating business model and continues a track record of consistent growth,” Saeed Al Tayer, managing director and chief executive of Dewa, said.

“We have ample liquidity on our balance sheet to allow us to pursue growth opportunities.”

The utility, which listed shares in April in the largest public float in the Middle East and Europe since Saudi Aramco's listing in 2019, will continue to make “disciplined capital investments, achieving cost savings while growing its footprint,” he said.

“We are committed to creating incremental shareholder value and to providing dividend visibility to our shareholders,” Mr Al Tayer added.

Dewa, the first government entity to list on the DFM, operates as a vertically integrated multi-utility, with business activities including electricity generation, transmission and distribution, water desalination and district cooling.

Electricity revenue rose 17.5 per cent, water revenue increased 20.2 per cent and district cooling revenue climbed 17.6 per cent in the first quarter, compared with the same period a year earlier.

Dewa currently provides services to 3.5 million Dubai residents, and the emirate’s active daytime population of more than 4.7 million. These numbers are expected to grow to 5.8 million and 7.8 million, respectively, by 2040, it said.

The company’s consolidated gross fixed assets grew by about 1.4 per cent to Dh204bn at the end of March from the end of last year. Administrative expenses of the company dropped 5 per cent to Dh703m during the first quarter.

Dewa is playing a key role in executing Dubai's Clean Energy Strategy 2050, which aims to ensure 100 per cent of the emirate's energy is generated through 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 5,000 megawatts upon completion in 2030, with a total investment of Dh50bn.

Dewa also owns 70 per cent of Empower, which owns, manages, operates and maintains district cooling plants and affiliated distribution networks across Dubai. It is planning to list Empower by the end of the year, Mr Al Tayer told Al Arabiya TV last month.

Plans to list the company were first announced in December last year as part of Dubai’s strategy to boost its stock market and attract more capital. Set up in 2003, Empower is a joint venture between Dewa and Dubai's Tecom Investments Group.

Dubai, which aims to boost its stock market amid a growing appetite for IPOs in the region, revealed plans last year to list 10 state-owned companies as part of its strategy to double the size of its capital market to Dh3 trillion and attract foreign investment.