Dewa's second-quarter net income climbs 40% on revenue surge

Dubai utility says increasing demand for power in the emirate boosted earnings

The Dubai utility company's revenue in the second quarter of 2022 climbed more than 14 per cent to Dh7 billion ($1.90bn). AFP

The Dubai Electricity and Water Authority has reported a 40 per cent rise in second-quarter net profit as revenue rose on increased power demand in the emirate.

Net profit attributable to the owners of the company for the three-month period to the end of June climbed to Dh2.41 billion ($654 million), Dewa said in a bourse filing on Thursday to the Dubai Financial Market, where its shares are traded.

Revenue for April to June period climbed more than 14 per cent to Dh7bn.

For the first six months of the year, Dewa’s net income climbed almost 39 per cent on an annual basis to Dh3.14bn. Revenue for the reporting period rose 15 per cent year-on-year to Dh12.08bn.

“Dewa’s half-year financial results demonstrate our commitment to advancing strategic priorities of sustainability focused smart growth ... and attractive capital returns for our shareholders," said Saeed Al Tayer, managing director and chief executive of Dewa.

“Continued focus on project delivery, innovation and accelerating our digital transformation has bolstered our results through the first six months of 2022.”

The utility, which listed shares in April in the largest public float in the Middle East and Europe since Saudi Aramco's listing in 2019, maintains "significant capacity to deploy capital through a disciplined investment strategy", he added.

Dewa, the first Dubai entity to go public among 10 state enterprises the government plans to list on the DFM, operates as a vertically integrated multi-utility. Its businesses include electricity generation, transmission and distribution, water desalination and district cooling.

The utility said its first-half revenue was driven by a rise in demand and a transition to a normalised tariff structure.

Energy demand in the emirate increased by 6.3 per cent on an annual basis, reaching 23.27 terawatt hours. Nearly 10 per cent of that was generated from solar plants.

Demand for water in Dubai also jumped 6.4 per cent year-on-year, with Dewa's peak demand in the first half of 2022 reaching 9.4 gigawatts

By the end of the second quarter, Dewa served 1.12 million customers, a 5.12 per cent increase from the same period last year, the company said.

Dewa’s majority-owned district cooling subsidiary, Emirates Central Cooling Systems Corporation — better known as Empower — also recorded strong growth in the first six months of the year. Its half-yearly net profit jumped 11 per cent on an annual basis to Dh432m. Empower's revenue for the period climbed 16 per cent to 1.15bn.

Dewa plans to publicly list Empower and its initial public offering will happen “soon” but not in the current quarter, Mr Al Tayer said in April.

"It [Empower's IPO] will be announced in due time ... probably at the end of the year," he said at the time.

Dubai, the commercial, trading and tourism hub of the Middle East, is investing heavily in building its energy infrastructure to boost power generation capacity as it expects a sharp rise in power demand with a growing population in the coming decades.

Its planned investment of Dh40bn in electricity and water projects over the next five years will focus on renewables, clean energy, electricity and water transmission and distribution networks.

The investment will cover the Hassyan Power Complex and water projects at Hassyan, in addition to completing continuing projects in infrastructure and smart systems elsewhere, Dewa said in July.

The investment plans, announced in April, includes spending Dh16bn on the expansion of electricity and water transmission and distribution networks, and about Dh12bn to complete the Independent Power Producer projects in the Mohammed bin Rashid Al Maktoum Solar Park.

"A further Dh3bn will be invested to expand capacity at Empower,” Mr Al Tayer said at the time.

In the first six months of this year, Dewa's installed capacity increased by 700 megawatts to 14.11 gigawatts.

It includes 600MW from the Hassyan Power Complex, which runs on natural gas, and 100MW from the fifth phase of the MBRSP, the largest single-site solar park in the world with a planned capacity of 5 gigawatts by 2030.