RIYADH: Saudi Electricity Company (SEC), the largest utility firm in the Gulf region, has reported a 27.7 per cent decline in the second-quarter net profit over the same period last year. The company, which the government is aiming to restructure to improve efficiency, made a net profit of SR1.43 billion ($381.3 million) in the three months to June 30, according to a bourse statement. This compares with a profit of SR1.97 billion in the same period a year earlier.
The company cited the higher cost of fuel and depreciation of assets for the weaker performance without elaborating. Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.
The Saudi government decided late last year to raise electricity, water and fuel prices to alleviate the burden of subsidies on its budget, although SEC said previously the price changes would roughly balance out in its earnings, as the rise in costs associated with higher fuel prices would offset increased revenues from electricity sales.
SEC’s results are acutely seasonal because of the big swing between power demand in winter and summer, when high temperatures lead most homes and businesses to use more air conditioning. The authorities had also planned to break up SEC into four parts by the end of the year, as part of a drive to improve the firm’s efficiency, although this process is being reviewed, sources aware of the matter told Reuters in May.
