Rami Moussilli, CEO, Alkhorayef Water and Power Technologies • Interview

Alkhorayef Water and Power Technologies was successfully listed in early 2021, reflecting the success the company has seen as a provider of reliable water and sanitation services across the country.

What does the successful public offering of Alkhorayef Water and Power Technologies and mean for the company moving forward?

The successful listing of Alkhorayef Water and Power Technologies in early 2021 is demonstrated by the strong turnout from investors. The institutional book-building process was 6,320% oversubscribed, while the retail offering was also 1,511% oversubscribed, reflecting investor confidence in the company. Shares of Alkhorayef Water and Power Technologies Co. (AWPT) rose by 30% to SAR93.60 (+SAR21.60 vs. the IPO price of SAR72) on its debut on the Saudi Stock Exchange. Our transformation into a listed company develops our strategy for corporate governance and sets solid foundations for the company’s future objectives of sustainable growth and extended foothold in the sector.

How will the government’s privatization initiatives impact the company’s future operations and plans?

Water is a vital natural resource to sustain life, and this has propelled the water sector into a top priority sector for development of nations and their wellbeing. In Saudi Arabia, growth in the government’s spending on the water sector remains intact despite economic volatility and, most notably, COVID-19. This is evidenced by the water market’s CAGR of 7% between 2015 and 2020, as well as the exponential growth of total government expenditure on the water market from 1% in 2015 to 2.3% in 2020. Moreover, the Saudi National Water Strategy 2030 set a clear roadmap that included several strategic programs, namely the privatization of water treatment and distribution, wastewater treatment, and reuse of treated sewage effluent. Alkhorayef

Water and Power’s expertise across the value chain of water and wastewater gives the company tremendous growth market potential in a sector driven by the national water strategy and Vision 2030 mandates. Alkhorayef Water and Power, with its network of strategic partnerships with global water companies and its qualifications to participate in bids with SWPC and other privatization offtakers, have an unmatched potential for growth with the privatization market forecasted to expand CAGR 44.8% in the next four years. Drawing on the company’s wealth of expertise, resources, and leadership, we are in prime position to leverage the privatization efforts and foresee our company to be one of the major developers in utilities in the future.

What impact did COVID-19 have on the company’s operations and performance?

Since the COVID-19 outbreak and to date, Alkhorayef Water and Power Technologies continues to provide reliable and vital water and sanitation services across the Kingdom. It adapted to this extraordinary and unprecedented situation by taking the necessary precautionary measures. The company successfully maintained its top priorities, namely: preserving the health and safety of all employees and citizens and working diligently to limit the spread of the virus. Being a leading water services provider, Alkhorayef Water continues to demonstrate steadfast commitment to providing excellent services in line with customers’ expectations. The company is making all efforts to support its customers and meet their needs through maintaining services undisrupted in this core sector. Moreover, the company expanded its operations by starting several full-scale operation and maintenance projects that includes water, wastewater, treated sewage effluent networks, and systems in various regions of Saudi Arabia at the peak of the COVID-19 lockdown during the first half of 2020 and continues to do so to this day. We demonstrated strong immunity against the pandemic implications and the subsequent restrictions. This is evidenced by our 2020 results showing a 23% revenue growth and a 24% rise in net income compared to 2019. The company reported in 2020 a net profit margin of 22% while preserving great value for shareholders by generating return on invested capital and equity at 31% and 39%, respectively, compared to 2019.