Revenue Growth, New Projects Boost Profitability of Saudi Public Utility Companies

People walk in the lobby of the Saudi Stock Exchange. (AP)
People walk in the lobby of the Saudi Stock Exchange. (AP)
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Revenue Growth, New Projects Boost Profitability of Saudi Public Utility Companies

People walk in the lobby of the Saudi Stock Exchange. (AP)
People walk in the lobby of the Saudi Stock Exchange. (AP)

Public utility companies listed on the Saudi Stock Exchange (Tadawul) achieved a 15.76 percent growth in their net profits by the end of the first half of 2024, reaching SAR 6.56 billion ($1.75 billion), compared to SAR 5.67 billion ($1.51 billion) during the same period in 2023.

The companies recorded a 14-percent growth in their revenues during the same half, equivalent to SAR 5.79 billion ($1.54 billion), after achieving sales worth more than SAR 46.76 billion ($12.47 billion) during the first half of 2024, compared to SAR 40.98 billion ($10.93 billion) in the same period last year.

This growth in revenues and net profitability is a result of an increase in sales and revenues, the launch of new projects and rise in the number of subscribers and demand for services.

The sector includes six companies: Saudi Electricity Company, ACWA Power, Alkhorayef Water and Energy Technology, Marafiq, National Gas and Industrialization Company (GASCO), and Miyahuna.

According to the financial results announced on Tadawul, all companies in the sector achieved growth in profits, except for Marafiq, which recorded a decline in profits by 59.37 percent to SAR 108.13 million.

In comments to Asharq Al-Awsat, financial advisor at the Arab Trader Mohammad Al-Maymouni said that Alkhorayef Company has driven this boost in profitability by registering the highest growth rates, as a result of recovery in the areas of development, design and production.

ACWA Power had also a strong impact on the growth of the sector’s profits, Al-Maymouni noted, thanks to the increased activity of water and energy supply projects and the cost of maintenance revenues, which contributed to the overall rise in the company’s revenues.

The cost of energy and fuel, as well as financing costs and interest rates, are the greatest burden on the profits of companies in the sector as they contributed significantly to the decline in the profitability of Marafiq by 59 percent during the second quarter of 2024, he noted.

Al-Maymouni highlighted factors that will support the profitability of the sector, such as continuity of projects acquired by sector companies, infrastructure and wastewater development operations, and lower financing costs and interest rates during the coming quarters.



Oman State-run Oil Firm OQ will Make Initial Public Offering, Potentially Seek Billions

Oil companies operating in Oman drilled many exploratory wells in various oil and gas concession areas, targeting different reservoirs at varying depths (Oman News Agency)
Oil companies operating in Oman drilled many exploratory wells in various oil and gas concession areas, targeting different reservoirs at varying depths (Oman News Agency)
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Oman State-run Oil Firm OQ will Make Initial Public Offering, Potentially Seek Billions

Oil companies operating in Oman drilled many exploratory wells in various oil and gas concession areas, targeting different reservoirs at varying depths (Oman News Agency)
Oil companies operating in Oman drilled many exploratory wells in various oil and gas concession areas, targeting different reservoirs at varying depths (Oman News Agency)

An Omani state-run oil and gas company announced Monday it will make an initial public offering of its exploration and production business, potentially seeking billions in a major move toward privatization in the sultanate.

OQ, formerly known as the Oman Oil Co., will offer up to 25% of shares in its exploration and production arm, the announcement said. It offered no proposed values for the deal, though Bloomberg quoted anonymous officials with knowledge of the deal suggesting the company could be worth an overall $8 billion, making the stake being put up worth some $2 billion, The AP reported.

“The intention to float OQ Exploration and Production reflects our commitment to unlocking new opportunities for growth, both for the company and for the sultanate of Oman,” OQ CEO Ashraf Hamed Al Mamari said in a statement.

The plan calls for the listing to take place in October, pending regulatory approvals. It plans dividends of $150 million for the first two quarters after that, with a planned dividend of $600 million annually, plus one linked to its performance.

OQ was founded in 2009 and is Oman's third-largest firm in the oil industry, following the state-owned Petroleum Development Oman and US firm Occidental Petroleum.