Research: Industrials
ACWA Power achieved record results for FY23 (year end 31 December 2023). Net profit attributed to equity shareholders stood at SAR1,662m, up 8% y-o-y, while operating income of SAR2,984m grew 14% y-o-y. ACWA added 10.7GW of power generation capacity to its portfolio throughout 2023, with 66% exclusively renewable energy. The company achieved a record 12 financial closes in FY23, with a total funding raise of approximately SAR60bn. It continues to progress its growth ambition of tripling its assets under management by 2030, sufficiently supported by long-term financing and funding facilities.
ACWA Power |
Record results for FY23
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Utilities |
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22 March 2024 |
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ACWA Power achieved record results for FY23 (year end 31 December 2023). Net profit attributed to equity shareholders stood at SAR1,662m, up 8% y-o-y, while operating income of SAR2,984m grew 14% y-o-y. ACWA added 10.7GW of power generation capacity to its portfolio throughout 2023, with 66% exclusively renewable energy. The company achieved a record 12 financial closes in FY23, with a total funding raise of approximately SAR60bn. It continues to progress its growth ambition of tripling its assets under management by 2030, sufficiently supported by long-term financing and funding facilities.
Funding growth
Capital recycling is a core element of ACWA’s business model. It enables improved returns as well as funding for growth. Due to ACWA’s increased growth pipeline, it expects to commit around $2bn per year between 2024 and 2030, having committed $1.5bn in 2023 (FY22: $1.2bn). However, parent operating cash flow was down 41% y-o-y due to higher cash inflows seen in FY22 as a result of greater amounts of capital recycling, refinancing and divestment proceeds from the Rabigh Arabian Water and Electricity Company and the Saudi Arabian Water and Electricity Company.
Renewables powering ahead
ACWA Power added 7.1GW of renewable capacity in FY23, taking renewables to 45% (50% target by 2030) of the total 55.1GW portfolio (30GW operational up from 25GW in FY22). In 2023 ACWA also signed 13 power purchase agreements, two water purchase agreements and one hydrogen purchase agreement, adding 10.7GW of power to its portfolio. ACWA’s growth ambitions in renewables will continue to unfold, with the company responsible for delivering the Saudi Kingdom’s Public Investment Fund programme, which accounts for 70% of Saudi Arabia’s total renewable installation by 2030 (13.7GW total capacity pipeline at end-2023 and 28.3GW remaining capacity to be tendered from 2024 onward, with the potential for additional capacity if Saudi renewable targets increase). It also scaled up its movement into green fuels in 2023, breaking ground on its second green hydrogen project in Uzbekistan.
Outlook
Over the past year ACWA’s shares have increased c 110%, fuelled by a large visible growth pipeline and ambitions of tripling its assets by 2030. Consensus forecasts for FY25e expect PBT and EPS to more than double from FY22, highlighting the company’s growth potential.
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Consensus estimates
Source: LSEG. Note: *Awarded one bonus share for every 500 shares owned. |
EDISON QUICKVIEWS ARE NORMALLY ONE-OFF PUBLICATIONS WITH NO COMMITMENT TO WRITING ANY FOLLOW UP. QUICKVIEW NOTES USE CONSENSUS EARNINGS ESTIMATES.
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Research: Real Estate
Triple Point Social Housing REIT (SOHO) reported a robust FY23 financial performance. Benefiting from inflation-linked rental growth and improving rent collection, DPS is once again covered on a run-rate basis, and we expect further progress. Operational initiatives included the roll-out of the new lease clause and launch of the eco-retrofit pilot project.