Saudi Arabia’s ACWA Power – which is a leading Saudi developer, investor, and operator of power generation, water desalination, and green hydrogen plants – has increased its net profit by 9.2 percent to $41.3 million (SAR 152 million) in the first quarter of 2022, compared to the same period last year.
The increase in net profit was driven by higher operating income, but partially offset by higher deferred taxes, the firm said in a statement.
For the first three months of 2022, ACWA Power earned an operating income before impairment loss and other expenses of SAR 517 million, which was 19.5 percent higher than the same period in 2021.
The chief executive officer and vice chairman of ACWA Power, Paddy Padmanathan, said: “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.”
Adjusted net profit attributable to equity holders of the parent, which calculates the impact of non-routine or non-operational transactions on the profit attributable to equity holders of the parent, rose 10.6 percent year-on-year to SAR 155 million in Q1 2021.
“We recognise that we live in a world that continues to present us with new and ongoing challenges some of which are outside of our control, such as the persistent high-cost environment generated by the global pandemic and now further exacerbated by the ongoing situation in Ukraine,” Padmanathan added.
“This is impacting global supply chain logistics, the cost of commodities and components, as well as causing some delays. However, we are continuously evaluating market conditions, assessing the risks, and developing mitigation plans jointly with our partners to find solutions that effectively address the ensuing impact.”
The firm saw three water and seven power projects come into operation between February and December 2021, driving growth in the first three months of 2022 by generating additional contractual, operations, and maintenance revenue streams.
This was further increased by the collection of performance liquidated damages from the EPC contractor of one of the projects, with the company’s operating profit adversely affected by extended outages in certain projects.
While no projects achieved financial close during this period, Rabigh Arabian Water and Electricity Company (RAWEC), an independent water, steam, and power producer and a subsidiary of ACWA Power supplying these utilities on a captive basis to Rabigh Refining & Petrochemical Company JSC (Petro Rabigh), a facility of Saudi Aramco, concluded the phase two of its debt refinancing.
“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, the chief financial officer and acting chief portfolio management officer at ACWA Power.
He added: “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.”
As of March 31, 2022, ACWA Power’s portfolio comprised 65 projects in operation, construction, or advanced development in 12 countries.
These projects have a value of SAR 253.4 billion at total investment cost, with capacity to generate 43.4 GW of electricity and produce 6.4 million m3 per day of desalinated water.
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