Riyadh-based utility developer Acwa Power has reported a 9 per cent increase in first-quarter profit as operating income grew on the back of the start of 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 on Wednesday in a statement to the Tadawul stock exchange, where its shares are traded. Operating income during the period rose more than 19 per cent to 517m riyals.
Higher profitability was driven by a jump in the share of net income from “equity-accounted investees” after new projects started and increased operating income as a result of “recovery of performance of liquidated damages”, the company said. Interest income also rose, while general and administrative expenses fell during the period.
“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,” said Paddy Padmanathan, chief executive and vice chairman of Acwa Power.
“As we work diligently to evolve our portfolio towards sustainable solutions, whether it is through expansion of our renewable portfolio, conversion to cleaner forms of energy source in our plants, investing in the largest green hydrogen and ammonia project in the world for cleaner fuel or altogether 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 space after Saudi Aramco's record IPO on the Tadawul in 2019, which raised $29.4bn.
The developer plays a pivotal role in diversifying Saudi Arabia's energy sources through its investments in renewable projects. 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 of Acwa Power.
“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.”
Earlier 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 complete by the end of this year.
Acwa Power operates in 12 countries across the Middle East, Africa, Central and South-east 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 per day of desalinated water.
The company has been selected as the preferred bidder to develop two solar photovoltaic plants in Indonesia, South-East Asia's largest economy, it said this month.
