|02 May, 2019

Saudi Electricity reports wider loss for first quarter, shares retreat

The company's shares dropped 1.35 percent to 16.08 riyals in very early trading on Thursday

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

Saudi Electricity, the Gulf’s largest utility, reported widening losses for the first quarter (Q1) of 2019, triggering a decline in the company’s share price on Thursday.

The company said in a statement to the exchange that the year-on-year increase in net losses was "mainly attributable to higher finance charges”.

Saudi Electricity’s Q1 2019 net loss amounted to 1.49 billion Saudi riyals ($397.34 million), compared to a loss of 1.21 billion riyals in Q1 2018.

“Winter months are seasonally weaker for Saudi Electric. However, the numbers are slightly better than expected,” Asim Bukhtiar, head of research, capital markets at Saudi Fransi Capital told Zawya by email.

The company’s Q1 revenue was largely flat year-on-year at 11.4 billion riyals.

Saudi Electricity's shares dropped 1.35 percent to 16.08 riyals in very early trading on Thursday at 11:32 GST. Shares have gained 6.08 percent so far this year.

“Key catalysts for Saudi Electric will be progress on privatisation, further cost optimisation and continued capex control,” Bukhtiar said.

“The company is freeing up more cash which can be utilised to offset debt burden,” he added.

(Reporting by Gerard Aoun; Editing by Michael Fahy)

(gerard.aoun@refinitiv.com)

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© ZAWYA 2019

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