Saudi Electricity Company profit falls by 33%
21 March 2025
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The net profit of state utility Saudi Electricity Company (SEC) has decreased by 33% to SR6.9bn ($1.8bn) in its fiscal year ending 31 December 2024.
The company attributed the decline to higher operating costs, the final settlement of dues worth SR5.7bn to Saudi Aramco, and higher finance costs.
SEC settled long-standing disputed amounts with the government related to historical discrepancies in fuel quantities, pricing, handling costs and electricity tariffs in February.
Excluding non-recurring items in comparative periods yielded a normalised net profit of SR12.1bn, however, up 8.9% over the 2023 figure.
The firm's revenues increased 17.7% from SR75.3bn in 2023 to SR88.7bn last year.
Factors contributing to the rise in revenue include a change in regulatory weighted average cost of capital and a growing regulated asset base.
Increased demand for electric power, subscriber base growth and new revenue from development projects such as the construction of substations and transmission lines for its clients, also contributed to higher revenue in 2024.
Adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) rose 11.2%, from SR33.9bn in 2023 to SR37.7bn in 2024, SEC said in its annual financial highlights.
The firm's cash flows from operating activities for 2024 increased to SR8.3bn due to positive working capital movements.
Capital expenditures also surged 44% in 2024 to an all-time high of SR60bn, as the firm invested in power infrastructure expansion, smart grid enhancements, generation efficiency improvements and service reliability upgrades.
SEC said that several credit ratings agencies have upgraded its ratings in 2024. Moody’s raised its A1 with a stable outlook rating of SEC to Aa3 with a stable outlook. Fitch Ratings upgraded SEC’s rating from A with a stable outlook to A+ with a stable outlook.
As a result, the company’s credit ratings are now aligned with Saudi Arabia's sovereign ratings.
Financing growth
In 2024, SEC completed several financing deals, with a total value of SR57.2bn, to support ongoing investment in future growth. These comprised sukuk (Islamic bond) issuances, including taps, worth SR10.9bn, and US dollar syndication and term loans worth SR46.3bn.
SEC also redeemed $3.5bn-worth of sukuk, including $4.5bn in local sukuk and $800m in international sukuk in January 2024 and $1.5bn in international sukuk in April 2024.
MEED’s April 2025 report on Saudi Arabia includes:
> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
> DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
> POWER: Saudi power sector enters busiest year
> WATER: Saudi water contracts set another annual record
> CONSTRUCTION: Reprioritisation underpins Saudi construction
> TRANSPORT: Riyadh pushes ahead with infrastructure development
> BANKING: Saudi banks work to keep pace with credit expansion
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MEED recently reported that Maaden had received bids for a tender to develop accommodation facilities for over 4,500 of its workers at the upcoming Al-Rjum gold mining and processing facility.
Bids for the Al-Rjum worker accommodation tender, which is also under the BOOT model, were submitted in late June. The operations and maintenance period for this contract is 15 years.
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Bahrain and US sign nuclear energy agreement
17 July 2025
Bahrain and the US have signed a cooperation agreement covering the field of peaceful nuclear energy.
The agreement aims to enhance collaboration in nuclear energy, recognising its vital role in sustainable development and energy security. It aligns with Bahrain's ambitious goal of achieving carbon neutrality by 2060 and contributes to global efforts to combat climate change.
As Bahrain explores alternative energy sources, senior officials have previously indicated to MEED that they are closely monitoring developments in small modular reactor (SMR) technology. This is particularly crucial for Bahrain, where limited land availability poses challenges for solar energy projects. Floating solar plants have been identified as a potential solution, but the exploration of nuclear energy and SMRs remains a priority for future energy diversification.
The agreement was signed during an official visit to the US by Prince Salman Bin Hamad Al-Khalifa, the crown prince and prime minister of Bahrain.
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Al-Zayani added that the agreement builds upon the Comprehensive Security Integration and Prosperity Agreement (C-SIPA) signed in 2023. The agreement aims to strengthen cooperation in defence, security, emerging technologies, trade and investment.
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> AGENDA: UAE-Turkiye trade gains momentum> INTERVIEW 1: Building on UAE-Turkiye trade> INTERVIEW 2: Turkiye's Kalyon goes global> INTERVIEW 3: Strengthening UAE-Turkiye financial links> INTERVIEW 4: Turkish Airlines plans further growth> CURRENT AFFAIRS: Middle East tensions could reduce gas investments> GCC REAL ESTATE: Gulf real estate faces a more nuanced reality> PROJECTS MARKET: GCC projects market collapses> INTERVIEW 5: Hassan Allam eyes role in Saudi Arabia’s transformation> INTERVIEW 6: Aseer region seeks new investments for Saudi Arabia> LEADERSHIP: Nuclear power makes a global comeback> LEVANT MARKET FOCUS: Levant states wrestle regional pressures> GULF PROJECTS INDEX: Gulf projects index continues climb> CONTRACT AWARDS: Mena contract award activity remains subdued> ECONOMIC DATA: Data drives regional projects> OPINION: A farcical tragedy that no one can endTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/14281751/main.jpeg -
Kuwaiti firm wins $53m Duqm coastal road contract
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Kuwaiti contractor Combined Group Contracting Company (CGCC) has won a RO20.6m ($53m) contract to construct coastal roads in Duqm.The scope of work covers the construction of roads with a total length of 14 kilometres, including a coastal road, a proposed service road, an extension to an existing service road, a resort street, four roundabouts, future extensions and proposed links.
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GlobalData estimates that the construction industry in Oman will grow by 3.6% in real terms in 2025, supported by rising foreign direct investment (FDI) in the country, particularly in the manufacturing sector, as well as investment in the energy and transport sectors.
The infrastructure construction sector is estimated to grow by 5.7% in 2025, before recording an annual average growth of 5.2% between 2026 and 2029, supported by the government’s investment in upgrading road and airport infrastructure.
CGCC’s contract win in Oman comes shortly after a key contract win in the UAE, worth AED685m ($186m).
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The contract duration is 25 months.
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Algeria awards $855m contract for gas production project
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Algeria’s national oil and gas company Sonatrach has awarded an $855m contract to China’s Jereh Group for a project to develop facilities at the Rhourde Nouss gas field.
Jereh Group said that its subsidiary Jereh Oil & Gas Engineering will build a natural gas booster station in the Rhourde Nouss gas field and upgrade and renovate related transmission pipelines.
The Yantai-based company cited a letter of award from Sonatrach and said that the contract will boost the company's footprint in North Africa’s oil and gas engineering service sector.
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Sonatrach, the largest gas producing company in Africa and the largest state-owned enterprise in Algeria, will pay $629.1m and $226m for the construction of the project, Jereh said.
Jereh's growing footprint
Jereh has been expanding overseas in recent years and has won contracts with major Middle Eastern oil and gas clients, including Saudi Aramco, Abu Dhabi National Oil Company (Adnoc) and Kuwait Petroleum Corporation.
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Riyadh Expo appointments are the launchpad for construction
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Commentary
Colin Foreman
EditorIt has been nearly two years since Saudi Arabia was selected as the host country for the World Expo 2030.
The vote was effectively the starting gun for the region’s largest and most challenging construction projects. The event will be hosted at a purpose-built venue on the outskirts of Riyadh, which is expected to require billions of dollars in construction spending and, perhaps more importantly, must be completed in time for the Expo’s opening in 2030.
Apart from a few high-level meetings with various stakeholders, there had been little update on the project since November 2023.
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Now, in July, US-based Bechtel has announced its appointment as the project management consultant (PMC) for the Expo.
These important updates serve as the launchpad for construction to begin. With the project leadership now established, attention can shift to actual construction. MEED recently reported that contractors have submitted bids for a contract to build the site offices required for initial construction works at the Expo site.
The pace of tendering and contract awards will ramp up sharply over the next two years. Experience from Dubai, which hosted Expo 2020, shows that after being initially selected for the event, a period of about two years follows as bureaucratic structures are established. It is worth noting that Dubai appointed its PMC team, comprising UK-based Mace and US-based CH2M (now part of Jacobs), in December 2014.
Construction activity then quickly ramps up, and in the case of Dubai, over $5bn of Expo-related contracts were awarded during the 2016-18 period.
For Riyadh, which is hosting the event exactly 10 years later, there will need to be a similar value and volume of work awarded during 2026-28 if the project is to be finished in time for 2030.
READ THE JULY 2025 MEED BUSINESS REVIEW – click here to view PDFUAE and Turkiye expand business links; Renewed hope lies on the horizon for trouble-beset Levant region; Gulf real estate momentum continues even as concerns emerge
Distributed to senior decision-makers in the region and around the world, the July 2025 edition of MEED Business Review includes:
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