Saudi Electricity Company Net Profit Rises 16.6% in H1 2024 to SAR5.2 Billion

The Saudi Electricity Company (SEC) reported a 16.6% rise in net profit to SAR5.2 billion for the first half of 2024, driven by higher regulated returns and increased electricity demand, according to an official press release from the company. Revenues climbed 15.5% year-over-year to SAR38.2 billion, reflecting the utility’s strong operational performance. In the second quarter alone, net profit increased 8.2% to SAR4.3 billion.

Context and Background

The improved financial results are attributed to a higher regulated weighted average cost of capital and an expanding regulated asset base, alongside rising electricity consumption across the Kingdom. The company also benefited from lower finance costs and reduced provisions for receivables. While operating and maintenance costs rose due to business expansion, improved resource management helped maintain overall efficiency.

Key Details

SEC invested SAR25.1 billion in capital projects during H1 2024, a 62.5% increase year-over-year, to support network expansion and service quality. It also secured nearly SAR18.5 billion in financing since the start of the year. In May 2024, Fitch Ratings upgraded SEC’s credit rating from A to A+ with a stable outlook, aligning it with the Kingdom’s sovereign rating from all major agencies: Fitch (A+), Moody’s (A1, Positive), and Standard & Poor’s (A, Stable).

SEC CEO Eng. Khaled Al-Gnoon said: “The positive financial and operating performance during the first half of 2024 reflects the company’s continued progress towards achieving financial sustainability.” He added that the company is making significant investments to diversify the energy mix and meet accelerating electricity demand.

Implications and Impact

Electricity demand surged during H1 2024, with peak load climbing 9.5% to 72.9 GW and overall consumption rising 6.1% to 146 TWh. The company welcomed over 165,000 new customers. During Hajj, SEC maximized resource allocation to ensure optimal comfort for pilgrims in Makkah, Madinah, and holy sites. Grid infrastructure was strengthened with new generation capacity, 830-kilometer link between central and southern regions, and a 660-kilometer interconnection between Arar and Rafha.

Vision 2030 Alignment

SEC’s performance directly supports Saudi Vision 2030 by ensuring energy supply security, efficiency, and reliability. The company’s investments in grid expansion and sustainable practices align with national goals to enhance the quality of electricity services and elevate the sector’s sustainability profile, contributing to the Kingdom’s long-term economic diversification and development objectives.

20 Questions

Q1. What was Saudi Electricity Company’s net profit for the first half of 2024?

A1. SEC reported a net profit of SAR5.2 billion for the first half of 2024, representing a 16.6% increase compared to the same period in 2023.

Q2. How much did SEC’s revenues grow in H1 2024?

A2. Revenues rose by 15.5% year-over-year to reach SAR38.2 billion in the first half of 2024, driven by higher regulated returns.

Q3. What was SEC’s net profit in the second quarter of 2024?

A3. In Q2 2024, SEC’s net profit increased by 8.2% to SAR4.3 billion compared to the same quarter in 2023.

Q4. What drove the improvement in SEC’s financial performance?

A4. The improvement was driven by higher regulated weighted average cost of capital, a growing regulated asset base, rising electricity demand, lower finance costs, and reduced provisions for receivables.

Q5. How much did SEC invest in capital projects during H1 2024?

A5. SEC invested SAR25.1 billion in capital projects during the first half of 2024, a 62.5% increase compared to the same period in 2023.

Q6. How much financing did SEC secure since the beginning of 2024?

A6. The company secured nearly SAR18.5 billion in financing since the start of 2024 to support its growth and investment plans.

Q7. What credit rating upgrade did SEC receive in May 2024?

A7. Fitch Ratings upgraded SEC’s credit rating from A to A+ with a stable outlook in May 2024.

Q8. Which major rating agencies assess SEC’s credit rating?

A8. The major agencies are Fitch (A+, Stable), Moody’s (A1, Positive), and Standard & Poor’s (A, Stable), all aligning with Saudi Arabia’s sovereign rating.

Q9. What did SEC CEO Eng. Khaled Al-Gnoon say about the company’s performance?

A9. He said the performance reflects continued progress toward financial sustainability and effective resource management while controlling operating expenses.

Q10. How did electricity demand change in H1 2024?

A10. Peak load climbed 9.5% to 72.9 GW, and overall consumption rose 6.1% to 146 TWh compared to the same period in 2023.

Q11. How many new customers did SEC add in H1 2024?

A11. SEC welcomed over 165,000 new customers during the first half of 2024, indicating growing demand.

Q12. How did SEC support pilgrims during Hajj 2024?

A12. The company maximized resource allocation to ensure optimal pilgrim comfort in Makkah, Madinah, and holy sites, addressing unprecedented peak loads.

Q13. What infrastructure projects were completed for grid strengthening?

A13. Projects included an 830-kilometer link between central and southern regions, a 660-kilometer interconnection between Arar and Rafha, and a 291 MW generation unit.

Q14. How does SEC’s performance align with Saudi Vision 2030?

A14. It supports energy supply security, efficiency, quality, and reliability of electricity services, while advancing sustainability goals within the sector.

Q15. What is the significance of SEC’s credit rating upgrade?

A15. The upgrade to A+ reflects SEC’s strengthened financial and strategic standing, aligning with the Kingdom’s sovereign creditworthiness.

Q16. Did SEC’s operating and maintenance costs increase?

A16. Yes, operating and maintenance costs increased due to business expansion and higher loads, but improved resource management partially offset the rise.

Q17. What was SEC’s revenue in Q2 2024?

A17. SEC’s revenue in the second quarter of 2024 reached SAR22.4 billion, a 13.5% increase compared to Q2 2023.

Q18. What factors reduced SEC’s costs in H1 2024?

A18. Lower finance costs and reduced provisions for receivables contributed to the improved financial results in H1 2024.

Q19. How is SEC diversifying the energy mix?

A19. SEC is making significant investments to diversify the energy mix and meet accelerating electricity demand, in line with national energy transition goals.

Q20. What is the outlook for SEC’s future growth?

A20. With strong capital investment, financing secured, and rising demand, SEC is well-positioned to continue its growth while enhancing service quality and supporting Vision 2030.

---