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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)
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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.

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FAO Aims for Key Outcomes at COP16 in Saudi Arabia

Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
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FAO Aims for Key Outcomes at COP16 in Saudi Arabia

Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)

Dr. Abdul Hakim Elwaer, Assistant Director-General of the Food and Agriculture Organization (FAO), stated that the organization will take an active role at COP16, the UN conference on combating desertification, scheduled to take place in Saudi Arabia in early December.

In remarks to Asharq Al-Awsat, he expressed confidence that the conference—the first of its kind in the Middle East—would produce significant outcomes.

Elwaer’s comments came during a roundtable organized by FAO’s regional office in Cairo, attended by a select group of media representatives. The session focused on FAO’s participation in the upcoming conference and the importance of the Rio Trio —the integrated framework of the three major UN conventions addressing climate change, biodiversity conservation, and desertification.

Fida Haddad, FAO’s Program Officer for Land Rehabilitation and Climate Change, highlighted the interconnectedness of the three conventions and noted that COP16 would place a strong emphasis on land and water rehabilitation and their sustainable management.

Haddad pointed out that approximately 90% of the Middle East is affected by arid conditions. Despite this, local communities and Arab governments have made notable progress in addressing desertification and drought. She also announced that, for the first time, FAO has successfully placed food systems on the COP16 agenda, enabling discussions on how land rehabilitation can enhance food supply chains and systems.

Elwaer underscored FAO’s central role in achieving the second Sustainable Development Goal (SDG): eradicating hunger. He emphasized that FAO actively engages in the UN conventions on climate change, biodiversity, and desertification, which collectively contribute to this mission.

FAO’s focus, according to Elwaer, is on transforming food and agricultural systems to become more inclusive, efficient, and sustainable, aiming for better production, nutrition, and livelihoods. He highlighted the organization’s success in integrating these priorities into the agendas of the three conventions and collaborating with host countries on joint initiatives.

He further noted that Saudi Arabia’s hosting of COP16 is particularly significant for the region, which faces pressing challenges such as water scarcity, desertification, and food insecurity. The conference presents an opportunity for Middle Eastern nations to highlight these issues, explore solutions, and ensure their inclusion in global environmental discussions, not only at this event but in future COP sessions, he underlined.

Elwaer emphasized the growing global attention on desertification, as it is now impacting regions previously unaffected, such as southern Europe and parts of Latin America. These areas are witnessing alarming declines in arable land and forests, prompting them to seek lessons from the Arab world, which has developed resilience strategies to combat desertification over centuries.

FAO will have a strong presence at COP16, with two dedicated pavilions—one in the Blue Zone for official delegations and another in the Green Zone to engage civil society and conference participants, he said.

He added that in collaboration with Saudi Arabia and the UN, FAO will lead coordination on Food Day and Governance Day, scheduled for December 5 and 6, respectively. The organization will also participate in other specialized sessions throughout the conference.