Saudi Electricity Company: Comprehensive Financial and Operational Analysis

The Saudi Electricity Company was established in 2000 after merging four major electricity companies that operated separately in various regions of the Kingdom. This merger was part of a government plan to restructure the energy sector, aiming to enhance operational efficiency and unify electricity production, transmission, and distribution operations. Since its inception, the company has become the national entity for electricity provision, taking on the role of the official supplier for all residential, industrial, and commercial needs in Saudi Arabia. The company was listed on the Saudi financial market (Tadawul) under the symbol 5110, becoming one of the largest companies in terms of capital and market value. Over the years, the company's operations have expanded to include massive transmission networks and diverse generation stations relying on gas, diesel, and gradually renewable energy. The company is subject to strict regulatory oversight from the Ministry of Energy and the Capital Market Authority, ensuring transparency in disclosure and service quality.

The Saudi Electricity Company occupies a pivotal position in the Saudi financial market, being one of the largest listed companies in terms of capital and the number of issued shares. It contributes significantly to the weight of the main market index (Tadawul), making its stock movement influential on the overall index. The Saudi government owns over 80% of the company's shares, reflecting the state's confidence in its continued support and development. The company's stock is characterized as a defensive stock with relative stability and regular returns, attracting individual and institutional investors seeking stability and regular distributions. This prominent position in the market places the company under continuous monitoring by analysts and investors, especially as its performance is linked to national economic growth and sectoral developments in energy.

The Saudi Electricity Company witnessed strong financial performance during 2024 and 2025, driven by rising energy demand and improved tariff structures. The stock price during this period ranged between 20 and 25 Saudi Riyals, while the market capitalization fluctuated between 200 and 250 billion Saudi Riyals. The price-to-earnings (P/E) ratio stabilized at levels ranging from 9 to 11, reflecting the company's stable profits and ample cash flows. The cash dividend yield was approximately 2-3% annually, confirming the company's commitment to a rewarding dividend distribution policy for shareholders. In the fourth quarter of 2024, the company achieved operating revenues of nearly 35 billion Riyals and a net profit between 4.5 and 5 billion Riyals, with significant annual growth in revenues and profits. Total revenue growth reached 10% compared to the previous year, while annual net profit increased by between 8 and 12%. These indicators reflect the company's strength in cost management and improving operational efficiency within the requirements of the national vision.

The Saudi Electricity Company falls under the energy sector, specifically the utilities and public services sector, which is considered one of the essential sectors in the Saudi economy. This sector is characterized by moderate growth and stability, given its continuous need for energy across all economic and social activities. The company primarily relies on power generation stations that use natural gas and diesel, with an increasing shift towards renewable energy. The company is committed to implementing government regulations related to tariffs and subsidies and continuously works on updating transmission and distribution networks to keep pace with urban and industrial expansion. It also plays a pivotal role in implementing government policies related to consumption efficiency and expanding renewable energy projects, enhancing its position as a pillar of the national energy sector.

In line with the goals of Vision 2030, the Saudi Electricity Company has launched several initiatives to transition to renewable energy. The company has participated in large solar and wind energy projects and signed partnership agreements with international companies specializing in clean energy technologies. Among the notable initiatives is the company's 15.8% participation in three major solar energy projects signed in 2024, in collaboration with the government energy purchasing company SPPC. This strategy aims to increase the share of renewable energy in the electricity production mix, reduce reliance on fossil fuels, and thus support the Kingdom's efforts to reduce carbon emissions and enhance sustainability. The company is also working on developing a smart electricity grid to integrate renewable energy sources more efficiently.

The Saudi Electricity Company monopolizes electricity distribution in the Kingdom, with no direct competing companies in this field. However, there are other companies that play roles in energy production and generation, such as ACWA Power, which participates in independent projects and sells electricity under long-term contracts. The market is also witnessing the entry of companies specializing in renewable energy projects, but their impact remains limited so far regarding comprehensive distribution. In the future, market dynamics may change as the government moves to open some activities for competition or partial privatization. Currently, the Saudi Electricity Company remains the dominant entity in the electricity sector, with a significant impact on energy prices and supplies.

The period between 2024 and 2025 witnessed several significant developments in the journey of the Saudi Electricity Company. Dr. Khalid bin Salem Al-Ghamdi was appointed as the new CEO of the company in October 2025, reflecting the company's direction to enhance leadership efficiency. The company launched new renewable energy projects and signed memorandums of understanding with international companies such as India's NTPC to establish joint entities for electricity station services and maintenance. The company also expanded maintenance and development contracts with international partners and worked on developing the smart grid and improving operational efficiency. Financially, the company continued to achieve growth in profits and revenues, supported by tariff adjustments and increased demand. These developments confirm the company's commitment to keeping pace with the global transition in the energy sector and enhancing its strategic position in the Saudi market.

The Saudi Electricity Company plays a crucial role in achieving the goals of Vision 2030, particularly regarding the development of energy infrastructure, improving consumption efficiency, and expanding reliance on renewable energy sources. The company seeks to update its networks and improve service quality, contributing to the implementation of clean energy projects in collaboration with both the public and private sectors. The company's efforts support the Kingdom's direction towards a diversified and sustainable economy by investing in modern technologies and developing human resources. The company is also committed to applying best practices in governance and financial disclosure, enhancing transparency and trust in the market.

The Saudi Electricity Company is overseen by the Capital Market Authority and the Ministry of Energy, and it complies with all disclosure and transparency requirements. The company provides quarterly and annual financial reports, and its data is audited by independent entities to ensure information accuracy. The company is also committed to implementing the best governance policies, including protecting shareholder rights, ensuring fairness in decision-making, and applying transparency standards in all its operations. This strict regulatory environment helps enhance the company's stability and attractiveness to investors, supporting the sustainability of its financial and operational performance in the long term.

The Saudi Electricity Company has launched several strategic projects in the field of renewable energy, including solar and wind energy projects in collaboration with local and international partners. The company's contribution to some large solar energy projects reached approximately 15.8%. The company is also working on developing a smart electricity grid that relies on smart metering technologies and demand management to improve operational efficiency and reduce losses. These initiatives contribute to enhancing the company's ability to keep pace with the global transition towards clean energy and support the Kingdom's goals in reducing emissions and achieving environmental sustainability.

The Saudi Electricity Company faces several challenges in the upcoming phase, the most prominent of which is the need for massive investments to expand production stations and update networks to meet rising demand. The transition to renewable energy sources also presents a technical and financial challenge that requires developing human capabilities and infrastructure. On the other hand, clean energy projects and the smart grid offer significant growth and profitability opportunities. The company must maintain service quality and customer satisfaction while continuing to adhere to governance and regulatory requirements. Amid these challenges and opportunities, strategic planning and innovation remain key to the company's success in the future.

Government policies play a pivotal role in determining the performance of the Saudi Electricity Company, especially regarding tariff pricing and government support. In recent years, there have been gradual adjustments in support, leading to increased revenues and improved profitability for the company. The government also supports the company's efforts to transition to renewable energy through financing programs and legislative facilitation. On the other hand, regulatory policies impose strict requirements on disclosure and service quality, enhancing investor confidence and ensuring the company's sustainability. Continuous interaction with government entities remains a key factor in the company's success and achieving its strategic goals.

The Saudi Electricity Company is characterized by a regular dividend distribution policy, allocating a significant portion of its annual profits to shareholders. The cash dividend yield in recent years has ranged between 2% and 3% of the stock value, making the stock an attractive option for investors seeking stable periodic income. The company announces its distributions after approving the annual financial results and is committed to depositing profits into shareholders' accounts within specified timeframes. The company also strives to achieve a balance between dividend distribution and investment in expansion projects to ensure sustainable growth and returns for shareholders in the long term.