Depreciation and purchased energy behind weak results
Saudi Electricity Company (SEC) has reported a SR774m ($206m) loss in the first quarter of 2011. The loss falls just short of the SR782m loss made in the same period last year.
Operating income came in at a SR883m loss in the first quarter of 2011 compared with SR888m loss in Q1 2010. The preliminary results were announced on 18 April.
The disappointing results are the result of increasing cost of purchased energy from SEC’s independent producers, as well as a rise in depreciation expenses from new projects, which came on stream. According to Saudi Arabian bank NCB Capital, the combination of both factors dragged the company’s performance down.
The results also indicated that the tariff change, which was implemented on 1 July 2010, has not eased that pressure.