Saudi Arabian utility developer ACWA Power has posted a net profit of SAR151.9 million (USD 40.5mn) after zakat and tax for Q1 2022, a 9% increase from the year-ago period.

Driven by higher operating income but partially offset by higher deferred taxes, ACWA Power’s net profit attributable to equity holders of the parent for the 1st three months of the year recorded SAR 152 million and was higher than the same period last year by SAR 13 million, or 9.2%.

Adjusted net profit attributable to equity holders of the parent, which calculates the impact of non-routine or non-operational transactions on the profit attributable to equity holders of the parent, recorded SAR155 million and was 10.6% higher than in Q1 2021.

The reported results are below what most analysts had predicted. Financial data provider Refinitiv had calculated a mean analysts’ estimate of 413 million riyals.

For the 1st three months of 2022, ACWA Power recorded strong growth both in operating profit before impairment losses and other expenses and net profit attributable to equity holders of the parent.

The growth was mostly driven by higher share of net results of equity accounted investees, primarily from Jazan’s start of operations and partially offset by mainly lower operating income on account of lower production in the CSP plants in Morocco because of extended outages.

For the 1st three months of 2022, ACWA Power earned an operating income before impairment loss and other expenses of SAR 517 million, which was 19.5% higher than the same period in 2021.

3 water and 7 power projects that came into operation between February and December 2021 were the engine of this growth in the 1st three months of 2022 by generating additional contractual, operations and maintenance revenue streams.

This was further increased by the collection of performance liquidated damages from the EPC contractor of one of the projects, with the Company’s operating profit adversely affected by extended outages in certain projects.

“With new contributions from several projects achieving their Initial or Project Commercial Operation Dates since the 1st quarter of 2021, we are pleased to report a solid start to 2022. As we work diligently to evolve our portfolio towards sustainable solutions, whether it is through expansion of our renewable portfolio, conversion to cleaner forms of energy source in our plants, investing in the largest green hydrogen and ammonia project in the world for cleaner fuel or altogether divesting fossil fuel-fired plants, our focus on driving sustainable change remains undeterred,” said Paddy Padmanathan, Chief Executive Officer and Vice Chairman, ACWA Power.