Tuesday, Oct 18, 2011

(This item was originally published on Monday.)

RIYADH (Zawya Dow Jones)--Saudi Electricity Co. (5110.SA), or SEC, the largest-listed utility in the Gulf, said Monday its third-quarter net profit fell 6% to 2.18 billion Saudi riyals ($580 million) from the year-earlier period, due to higher costs of consumption and purchased energy.

Investment bank NCB Capital had expected the utility to post a third-quarter net profit of SAR2.52 billion, while Cairo-based EFG-Hermes projected a net profit of SAR2.8 billion.

SEC, whose major shareholder is the Saudi government, typically posts losses in the cooler months and swings to profit during the intense heat of the summer.

Earnings per share for the first nine months of the year came in at SAR0.66, compared with SAR0.62 a year earlier; third-quarter operating profit fell to SAR2.13 billion from SAR2.19 million a year earlier, SEC said in a statement posted on the Saudi bourse website.

Saudi Arabia, which is struggling to supply uninterrupted electricity during a population boom and industrial expansion, expects SEC to invest $80 billion over the next 10 years to add 20,000 megawatts of power generation capacity.

Saudi Electricity will receive a SAR51.1 billion lifeline from its main shareholder, the Saudi government, to finance new projects. The firm has also mandated HSBC Holdings PLC (HBC) and Deutsche Bank AG (DB) for a potential U.S. dollar-denominated bond issue later this year aimed at raising funds to support its expansion plans, SEC Chief Executive Ali Saleh Al Barrak said earlier this year.

Earlier this month, the firm said it launched the kingdom's first power station using solar energy at the southern Red Sea coast. The construction of the power plant located at the Farasan Island in the Jizan province was funded by the Japanese firm Showa Shell, which has carried out the installation of all the fixtures, equipment and photovoltaic panels.

On Sunday, SEC signed a SAR5.4 billion contract with an unnamed local firm to boost power generation at its tenth station in the capital Riyadh. The deal will boost the station's power generation by 1200 megawatts.

-By Summer Said, Dow Jones Newswires; +966-546-842373; summer.said@dowjones.com

(END) Dow Jones Newswires

18-10-11 0357GMT