Saudi Electricity returns to profit after government fee canceled

The company reported net profit of $450.4mln

  
Image used for illustrative purpose. A vehicle drives past workers near power plant number 10 at Saudi Electricity Company's Central Operation Area, south of Riyadh.

Image used for illustrative purpose. A vehicle drives past workers near power plant number 10 at Saudi Electricity Company's Central Operation Area, south of Riyadh.

REUTERS/Fahad Shadeed

DUBAI: Saudi Electricity, the region's biggest utility, returned to profit in the first quarter helped by sweeping new reforms aimed at boosting its efficiency.

The company reported net profit of SR1.69 billion ($450.4 million) compared to a loss of SR2.44 billion in the year-earlier period.

Sales rose 17 percent to SR13.35 billion, the company said in a stock exchange filing on Wednesday.

It attributed the improved performance to a number of factors including the cancellation of the government fee which took effect from the start of this year as well as well as reduced overall debt levels.

Last year Saudi Arabia introduced a number of electricity sector reforms aimed at changing the country's energy mix and improving the efficiency of the transmission network which could lead to the eventual integration of the Kingdom's electricity network with some of its neighbors.

At the same time its government liabilities were converted into a perpetual equity-like financial instrument.

A new revenue model agreed at the same time has also meant the company is better able to achieve a fair return on invested capital.

Copyright: Arab News © 2021 All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From Equities