Fitch Ratings Upgrades Saudi Electricity Company’s Credit Rating to ‘A+’ with Stable Outlook, on Par with the Kingdom’s Sovereign Rating

Saudi Electricity Company (SEC), announced that Fitch Ratings has upgraded its Ratings to ‘A+’ from ‘A’, aligning it to be on par with the national sovereign rating.

Reflecting on the news of the upgrade, Eng. Khaled bin Hamad Al-Gnoon, CEO of the Saudi Electricity Company, commented: “We are pleased with this positive upgrade of SEC’s credit ratings, which stands as a testament to the efforts and investments we continue to make to bolster the reliability and efficiency of the electrical grid. This improved rating is reflective of our best-in-class governance, our close alignment with the Ministry of Energy and KSA’s decarbonization strategy, and our solid financial profile. We are committed to maintaining our service excellence and fulfilling our pivotal role in powering Saudi Arabia’s future.”

The upgrade was driven by several key factors including recognition of SEC’s robust decision-making, strong government support, and alignment with national policy. The government’s 81% ownership, strategic oversight, and SEC’s key role in KSA’s decarbonization efforts underscore this support. Additionally, the upgrade recognizes SEC’s stable financial profile which is secured by the conversion of SAR168 billion of SEC’s liabilities into equity-like instruments, the company’s leverage headroom and strong cash flow visibility, and its crucial role in KSA’s energy plans.

In Q1’24, SEC ramped up growth plans with an ambitious capex program deploying SAR10.5 billion in capital investments in the company’s generation, transmission, and distribution projects reaffirming the company’s steadfast dedication to accelerating investments in its grid infrastructure, with the goal of meeting the expected increase in demand for electricity. For the first quarter of 2024, the company reported SAR 15.9 billion in revenue, a 9.1% year on year increase in EBITDA to SAR 6.8 billion, and an 87% year on year increase in net profit to SAR 897 million.