Acwa Power’s first-quarter net profit increases by 9%
Riyadh-based utility developer Acwa Power reported a 9 per cent increase in first-quarter profit, as operating income was boosted by new projects.
Net profit after zakat and tax for the three months to the end of March climbed to 152 million Saudi riyals ($40.53m), Acwa Power said yesterday in a statement to the Tadawul stock exchange, where its shares are traded.
First-quarter operating income rose more than 19 per cent to 517m riyals.
Profitability was driven by a jump in the share of net income from “equity-accounted investees” after projects started, and by increased operating income as a result of “recovery of performance of liquidated damages”, the company said.
Interest income rose, while general and administrative expenses fell.
“With new contributions from several projects achieving their initial or project commercial operation dates since the first quarter of 2021, we are pleased to report a solid start to 2022,” Paddy Padmanathan, chief executive and vice chairman of Acwa Power, said.
“As we work to evolve our portfolio towards sustainable solutions, whether it is through expansion of our renewable portfolio, conversion to cleaner forms of energy in our plants, investing in the largest green hydrogen and ammonia project in the world or divesting fossil fuel-fired plants, our focus on driving sustainable change remains undeterred.”
Acwa Power raised $1.2bn from its initial public offering last year, making it one of the biggest listings in the energy sector after Saudi Aramco’s record IPO on the Tadawul in 2019, which raised $29.4bn.
Acwa Power plays a pivotal role in diversifying Saudi Arabia’s energy sources through its investments in renewables. The world’s largest oil exporter plans to add gas and renewables capacity equating to one million barrels of oil per day by 2030.
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, is the biggest shareholder in the company, with a 50 per cent stake.
Acwa Power has seven other stakeholders, including the Saudi Public Pension Agency.
“Looking ahead to 2022, Acwa Power has access to diverse funding options that include our existing level of strong liquidity to finance our visible pipeline of power, water and green hydrogen projects,” said Kashif Rana, chief financial officer and acting chief portfolio management officer.
“While higher costs and supply chain challenges persist and create pressure over our EPC partners, we do recognise the need for a sustainable and more permanent solution to mitigate these stresses.”
This year, a consortium led by Acwa Power closed a senior debt facility of more than $1.3bn to finance a multi-utilities project on the Red Sea powered by renewable energy.
The project includes the provision of renewable power, potable water, wastewater treatment, district cooling and solid waste treatment for 16 hotels, an international airport and related infrastructure. Phase one is expected to be completed by the end of the year.
Acwa Power operates in 12 countries across the Middle East, Africa, Central and Southeast Asia. It has a portfolio of 65 assets with a total investment of $67.6bn, producing 43.4 gigawatts of power and 6.4 million cubic metres a day of desalinated water.
The company is preferred bidder to develop two solar photovoltaic plants in Indonesia, it said this month.