Gulf’s largest utility firm cited increased operational revenues from higher tariffs and a reduced amount of energy bought from independent producers as the reason for its smaller loss
State-run Saudi Electricity Co (SEC), the Gulf's largest utility firm, reported a narrowing first-quarter net loss on Thursday as higher tariffs boosted its operating income.
The company, which the government aims to split into several components this year to improve efficiency, made a loss of 1.37 billion riyals ($365.32 million) in the three months to March 31, according to a bourse statement.
This compares with a loss of 1.94 billion riyals in the same period a year earlier. NCB Capital had forecast of SEC would make a quarterly loss of 1.28 billion riyals.
The utility cited increased operational revenues from higher tariffs and a reduced amount of energy bought from independent producers as the reason for its smaller loss.
This is despite an 80 percent increase in the cost of fuel as a result of higher energy prices, the company said.
Saudi's government has lowered utility subsidies, raising electricity, water and fuel prices. Saudi officials say these increases are unlikely to change the projected growth in demand, which has been at around 8 percent per year.
SEC has said the price changes would roughly balance out because the higher costs associated with higher fuel prices would be offset increased revenues from electricity sales.
Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.
SEC's results are acutely seasonal because of the big swing between power demand in winter and summer, when high temperatures lead to much greater use of air conditioning.