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5110.SE (Reuters)
SECO AB (Bloomberg)
Saudi Electricity Co.
CMP: SR9.3
» The revenues of Saudi Electricity Co. (SEC) are cyclical, affected by seasonal weather changes during the year.
The company’s revenues are lower during the winter months so the first & last quarter financial results do not
reflect the accurate picture for the full year results. The summer months due to intense weather witness higher
energy consumption & mostly result in higher revenues.
» SEC’s profitability increase of 9.8% in FY07, seems to be closing at subdued FY08 levels as 9M08 performance
recorded 26.5% (YoY) decline. The increased level of operational costs are believed to be the major profitability
dampener, over which the company is trying to develop better control in future.
SRmn 2005 2006 2007 2008E 2009E 2010E 2011E
Sales Revenue 18,761 19,707 20,979 22,401 23,798 25,261 27,058
Gross Profit 1,645 1,337 1,539 780 1,050 1,433 1,762
Net Profit 1,483 1,414 1,553 911 1,209 1,571 1,877
Shareholders’ Equity 46,262 47,129 48,134 48,496 49,157 50,179 51,507
Gross Fixed Assets 170,662 181,636 194,599 210,280 224,559 238,453 252,523
Total Assets 117,563 127,208 136,510 148,248 159,017 167,109 175,959
Ratios
Gross Profit Margin(%) 8.8 6.8 7.3 3.5 4.5 5.7 6.5
Operating Profit Margin(%) 6.7 5.9 6.0 2.1 3.1 4.4 5.2
Net Profit Margin (%) 7.9 7.2 7.4 4.1 5.1 6.2 6.9
LT Debt /Equity (x) 0.5 0.8 0.8 0.8 0.9 0.9 0.9
ROAA (%) 1.3 1.2 1.2 0.6 0.8 1.0 1.1
ROAE (%) 3.2 3.0 3.3 1.9 2.5 3.2 3.7
Earnings per Share (SR) 0.36 0.34 0.37 0.22 0.29 0.38 0.45
P/E (x) 81.8 38.3 39.6 42.3 31.9 24.5 20.5
P/BV (x) 2.6 1.1 1.3 0.8 0.8 0.8 0.7
Historical P / E & P / BV multiples pertain to respecitve year -end prices, while those for future years are based on closing prices on the TASI as of Dec 29, 2008
(Source: Company Reports & Global Research)
Global Investment House 102 Saudi Arabia Economic Overview - January 2009