DEWA reports Dh11.1b net profit for 2022

Dubai emirate’s state-owned utility, Dubai Electricity and Water Authority (DEWA), reported a Dh11.1 billion standalone net profit that includes the sales proceeds of its shares in district cooling subsidiary Empower.

DEWA reported a 22 percent growth in consolidated net profit of Dh8 billion on Dh27.4 billion annual turnover, which was 15 percent higher when compared to 2021.

This is the first time DEWA, which enjoys near monopoly in power generation, water desalination, transmission and distribution, announced its financial results – which comes 10 months after it went public through an Initial Public Offering (IPO) that raised Dh22.32 billion in April 2022.

The stock price of DEWA, with 50 billion shares, closed at Dh2.39, putting market capitalization at Dh119.5 billion, prior to the announcement on Wednesday (February, 2023).

“Demand for power in 2022 reached 53.2 TWh compared to 50.4 TWh in 2021, representing a 5.56 percent increase. Further, DEWA’s peak demand in 2022 was 9.5 GW, which represents a 3.3% increase over the same period of 2021. For the year 2022 and 2021, DEWA achieved peak demand in the month of July. Average customer power consumption in 2022 was higher than that of 2021,” DEWA said in a statement.

Demand for water in 2022 reached 136.9 billion imperial gallons (BIG) compared to 128.6 BIG, representing a 6.45 percent increase. Average customer water consumption in 2022 was higher than that of 2021. Relative to capacity, DEWA’s minimum reserve margin in 2022 for power and water was 28 percent and 15.2 percent respectively. By the end of 2022, DEWA served 1,157,501 customers, representing an increase of 14,438 customers from the third quarter of 2022. DEWA added 51,089 new customers in 2022, which is a 4.6 percent increase from 2021.

“In 2022, DEWA achieved record results and delivered its best financial performance and growth in its operating history. For the full year 2022, we delivered a consolidated net profit of Dh8 billion, which is an increase of 22 percent over the full year 2021. Relative to 2021, our gross profit, operating profit and net profit margins increased. For the year 2022, DEWA had promised to pay Dh6.2 billion in dividends. Instead, DEWA intends to pay Dh9.9 billion in dividends to its shareholders. The delivery of our strategy has translated into exceptional returns to our shareholders,” Saeed Mohammed Al Tayer, MD & CEO of DEWA said.

“Looking ahead, I am optimistic about our operating and financial outlook for 2023 and beyond. DEWA stands ready to support the Dubai Economic Agenda (D33), which aims to double the size of Dubai’s economy over the next decade. In addition, our strategy, growth pillars and capital commitments are well positioned to deliver on our energy transition ambitions to achieve the Dubai Clean Energy Strategy 2050 and the Dubai Net Zero Emissions Strategy 2050 to provide 100 percent of the energy production capacity from clean energy sources by 2050, while supporting the strong demand for our exclusive portfolio of products and services in Dubai.

For the year 2022, DEWA commissioned two 400 kV substations, fifteen 132 kV substations and 1,113 11-6.6 kV substations. DEWA has deployed 1,108,530 smart electricity meters and 996,917 smart water meters. The company recorded a customer minute lost time of 1.19 minutes, which is the lowest recorded rate in the world. DEWA reduced its collection days to 40 versus 43 from the end of 2021, indicating faster collection.

By the end of 2022, the company installed an additional 1,100 MW of generation capacity, representing an 8.2% increase. Of this 1,100 MW, 600 MW was gas fired and 500 MW was solar. The company’s current installed generation capacity stands at 14.5 GW with 2 GW of this capacity representing renewable energy. The company’s current installed desalinated water production capacity was unchanged for 2022 and stands at 490 MIGD.

For 2023, DEWA said it expects to add an additional 2GW of generation capacity (13% increase), and 210 MIG of water reservoir capacity. By the end of 2030, DEWA plans to have gross installed capacity of 20 GW and 730 MIGD of desalinated water. Of this 20 GW, DEWA plans to have 5 GW of installed renewable capacity, representing 25 percent production from renewable sources. In addition, the company plans to add an additional 240 MIGD of desalination capacity using reverse osmosis technology.

A Dubai-based stock broker, on condition of anonymity, said, “DEWA is a lucrative stock for investors, due to the monopoly it enjoys in the state. The results make its share more desirable to investors. As a state-run utility, DEWA is run very professionally, unlike those run by government bureaucracy. DEWA’s leadership runs the organisation like a private utility. Hence it is one of the most profitable asset the government can rely on.”