top of page
  • Sheryll Mericido

Reduced electricity sales, increased costs, sales mix shift impact quarterly net income

The drop in net income for the current quarter compared to the same quarter last year is primarily the result of reduced electricity sales, which decreased by 439 MSAR due to lower volume sold and a shift in the sales mix, as well as a combined increase in operation and maintenance costs and financing costs, which increased by 1,243 MSAR. These have been largely offset by higher net other income and expenses, reduced provision for receivables from consumption of electricity and other receivables, and an increase of 250 MSAR in the needed revenue recognized during the current quarter compared to the same quarter of the previous year.

As of July 1, 2022, the Energy Conversion Agreements (ECAs), the Bulk Supply Agreement (BSA), and the transfer of the Fuel Supply Agreements from the Saudi Electricity Company to the Saudi Energy Purchase Company (SPPC) have all been put into effect. This has caused a change in the cost of purchased power and fuel compared to the same period the previous year.

Additionally, according to the BSA, the bulk supply tariff varies during the fiscal year depending on the seasons: it is lower in the winter (from January to April and October to December) and higher in the summer (from May to September). On the other hand, there are no discernible seasonal variations in the tariff under which energy is sold to customers or in ECA revenue. The Bulk Supply Average Tariff is applied by the SEC to account for the costs of acquiring power in order to match the income realized. The average tariff for bulk supplies is determined annually.

The decline in operational revenues for the company as a result of lower volume sales reflecting seasonality of sales, along with an increase in financing expenses, are the main causes of the current quarter's net income falling short of the prior quarter's.

After subtracting the dividends from the speculative instrument in the amount of 1,889 million Saudi riyals, the net loss attributable to ordinary shares for the first quarter of 2023 came to 1,409 million Saudi riyals, as opposed to a net loss of 372 million Saudi riyals for the same period the year prior. As a result, the basic and diluted loss per share for the current period was 0.34 riyals, as opposed to a loss of 0.09 riyals for the same period last year.

Do you want a Email?

- Get your own Email like [email protected]

- 50 GB webspace included

- complete privacy

- free newsletters

We are listening.
Please get in contact with us.

Thanks for submitting!

© 2023 is in development and

operated by Jobtiles LTD

Privacy Policy

Publisher&Editor: Harald Stuckler

bottom of page