Saudi Electricity Co. (SEC) reported an over fourfold rise in 2021 net profit to SAR 14.391 billion before deducting the payment of Mudaraba coupon in 2021, compared to SAR 3.026 billion a year earlier.
After deducting the SAR 7.700 billion payment of Mudaraba coupon, the company would have achieved a net profit of SAR 6.729 billion (SAR 1.62 earnings per share) in 2021, compared to a net profit of SAR 2.098 billion (SAR 0.50 EPS) a year earlier.
| Item | 2020 | 2021 | Change |
|---|---|---|---|
| Revenues | 68,708.92 | 69,338.04 | 0.9 % |
| Gross Income | 8,322.53 | 20,541.96 | 146.8 % |
| Operating Income | 6,901.52 | 18,582.12 | 169.2 % |
| Net Income before deducting Mudaraba Instrument profit | 3,025.55 | 14,390.87 | 375.6 % |
| Net Income after deducting Mudaraba Instrument profit | 2,098.17 | 6,729.50 | 220.7 % |
| Average Shares | 4,166.59 | 4,166.59 | - |
| EPS before deducting Mudaraba Instrument profit (Riyals) | 0.73 | 3.45 | 375.7 % |
| EPS after deducting Mudaraba Instrument profit (Riyals) | 0.50 | 1.62 | 220.7 % |
The profit surge came as the utility continued implementing the regulatory and financial reforms of the electricity sector, which were approved in November 2020, according to which the government fee was cancelled starting from Jan. 1, 2021, while SEC incurred a government fee costs of SAR 15.07 billion in 2020.
The company also adopted the regulatory asset base (RAB) model to regulate revenue, effective from the fiscal year 2021. Accordingly, SEC recognized an estimated amount of SAR 1.7 billion as other operating revenue for 2021, compared to the recognition of SAR 6.1 in the balance sheet account for 2020 (booked in Q4 2020).
Moreover, the minimum service operating cost model was used to determine the 2020 required revenue, as approved by the Ministerial Committee for Restructuring the Electricity Sector. The improved power demand in 2021 compared to a year earlier was positively reflected on growing electricity sales, electricity service connection fees and transmission system revenue, which completely offset the decrease in other operating revenue.
SEC also cited decreased finance costs in the income statement due to a decrease in overall debt levels, along with lower general and administrative expenses and non-recurring expenses.
In Q4 2021, SEC swung to a net loss of SAR 2.437 billion against a net profit of SAR 4.134 billion in the yea-ago period.
The company posted a net profit of SAR 7.379 billion in Q3 2021, including SAR 286.3 million worth of provision for electricity consumers and other receivables.
| Item | Q4 2020 | Q4 2021 | Change |
|---|---|---|---|
| Revenues | 20,125.63 | 15,577.22 | (22.6 %) |
| Gross Income | 5,385.82 | 2,561.46 | (52.4 %) |
| Operating Income | 5,076.83 | 1,997.65 | (60.7 %) |
| Net Income before deducting Mudaraba Instrument profit | 4,134.99 | (505.91) | (112.2 %) |
| Net Income | 3,207.62 | (2436.99) | (176.0 %) |
| Average Shares | 4,166.59 | 4,166.59 | - |
| EPS before deducting Mudaraba Instrument profit (Riyals) | 0.99 | (0.12) | (112.2 %) |
| EPS (Riyals) | 0.77 | (0.58) | (176.0 %) |
Shareholders’ equity, after before Mudaraba deduction, stood at SAR 83.7 billion in 2021, up 4.8% from SAR 79.9 billion in 2020.
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