Saudi Electricity Company (SEC) has announced further losses for the fourth quarter of 2011.

The state-owned company made a net loss of SR514m ($137m) for the quarter, a loss of SR324m when compared with the same period in 2010.

“The reason for the decline in profits over the past 12 months is due to higher costs of consumption and purchased energy … the reason for the net loss in the fourth quarter is due to the rise in consumption costs,” said a statement on the Saudi Stock Exchange (Tadawul).

Revenues were down 2.5 per cent year-on-year, coming in at SR2.22bn at the end of 2011.

Analysts say the key issue is SEC’s expansion plans, which are leading to high capital expenditure (capex) and so higher depreciation charges. Higher costs not being passed on to the consumer by the company are decreasing its profit margins.