ACWA Power reports net profit of SAR152m in Q1 2022

Saudi-based ACWA Power Company (ACWA Power), which is a key developer, investor and operator of power generation, water desalination and green hydrogen plants, has announced its financial results for Q1 2022. The company said it recorded strong growth both in operating profit before impairment losses and other expenses and net profit attributable to equity holders of the parent.

Mohammad Abunayyan, chairman, ACWA Power, said, “As a Saudi company with a global portfolio and links to global financial markets, our overall business performance has resulted in a strong financial result for the start of 2022, which is a testament to the stability of our contracted and diversified business model. As 2022 unfolds, we look forward to strengthening our portfolio in existing and potential markets and assist governments as they work towards diversifying their energy mix with sustainable options in power generation, water desalination and green hydrogen.”

For the first three months of 2022, ACWA Power earned an operating income before impairment loss and other expenses of SAR517m, which was 19.5 per cent higher than the same period in 2021. Three water and seven power projects that came into operation between February and December 2021 were the engine of this 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.

Paddy Padmanathan, CEO and vice chairman, ACWA Power, 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. 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.”

He added: “All the while, 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. 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.”

Driven by higher operating income but partially offset by higher deferred taxes, ACWA Power’s net profit attributable to equity holders of the parent for the first three months of the year recorded SAR152m and was higher than the same period last year by SAR13m, or 9.2 per cent. 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, recorded SAR155m and was 10.6 per cent higher than in Q1 2021.

As of March 31, ACWA Power’s portfolio consisted of 65 projects in operation, construction, or advanced development in 12 countries. These projects have a value of SAR253.4bn at total investment cost, with capacity to generate 43.4GW of electricity and produce 6.4 million cubic metres per day of desalinated water.

In recent news, Saudi sovereign wealth fund Aramco signed non-binding memorandums of understanding with ACWA Power and other entities to launch a carbon trading exchange.

Read: Aramco and ACWA Power look to join Saudi carbon trading exchange

In February, a consortium led by ACWA Power achieved financial close for the $1.302bn senior debt facilities for the Red Sea Project. The consortium also consists of SPIC Huanghe Hydropower Development Company and Saudi Tabreed Cooling Company.

Read: ACWA Power led consortium achieves financial close for Red Sea Project