Saudi Arabia’s Acwa Lifts Third-Quarter Net Profit 71.1% to SAR 635.1 Million

By The Edge Research Team

Acwa Power Company’s third-quarter net profit rose 71.1% to SAR 635.1 million, which it credits mainly to its equity-accounted projects and higher gross profit, while nine-month profit barely moved.

For shareholders, the quarter marks a sharp step up, with operating profit 88.2% higher on the year. The nine months read differently: adjusted net profit, which strips out non-routine items, fell 16.0%, and management links weaker development income to slower progress on project milestones. In The Edge’s reading, the third quarter’s gain rests mainly on investee income and gross profit, the drivers the company names first, but the full-year outcome still depends on when delayed project milestones arrive, the factor behind the weaker nine months.

Acwa filed the results on the Saudi Exchange at 12:43 GMT on 5 November, alongside an investor report carrying a letter from the chief executive and management’s discussion and analysis. KPMG Professional Services reviewed the interim statements and issued an unmodified conclusion.

Investee income and gross profit lift the quarter

Revenue rose 32.7% on the year to SAR 2.20 billion. The company points to higher operation and maintenance revenue, higher energy revenue and higher development, procurement and construction revenue.

Gross profit grew more slowly, by 16.6%. The gross margin therefore narrowed to 49.3% from 56.1% a year earlier. It was still wider than the second quarter’s 48.6%.

Operating profit, which includes Acwa’s share of the net income of its equity-accounted investees, rose to SAR 1.11 billion. It exceeded gross profit in the quarter, and the operating margin widened to 50.2% from 35.4%.

Net profit attributable to shareholders gained SAR 263.9 million on the year. Beyond investee income and gross profit, the company cites lower general and administrative expenses. Higher financial charges, higher project development and acquisition costs and a larger exchange rate variance partly offset the gain.

Against the second quarter, profit more than doubled from SAR 308.4 million. Quarterly revenue rose 9.4%, which the company attributes to higher operation and maintenance revenue and higher development, procurement and construction services. Lower financial charges also helped, while higher project development costs and a higher income tax and zakat charge partly offset the increase.

Three non-routine items in the quarter largely cancelled each other out. Acwa booked a non-cash deferred tax expense of SAR 112.9 million, its share at Acwa GUC in Turkey. The charge follows a 12.5% Turkish corporate tax rate for qualifying producers from 2027, which management applied although it says some uncertainty remains over how Turkish law defines production.

Against that, Acwa revised the expected settlement date of a non-interest-bearing loan to 31 December 2030, producing a SAR 118.6 million remeasurement that raised reported profit. The loan began as a SAR 901 million special dividend that the Public Investment Fund converted in 2020.

Adding a SAR 13 million impairment, the quarter’s net adjustments came to SAR 7 million. Adjusted net profit was SAR 642 million, up 73.0% on the year.

Third-quarter results (in SAR millions)

Net profit is attributable to shareholders of the company. Operating profit is the filing’s operational profit, which the company also reports as operating income before impairment loss and other expenses, including its share of investees’ net income.

Development income weighs on the nine months

Nine-month revenue rose 16.0% to SAR 6.24 billion. Higher operation and maintenance revenue, higher energy revenue and the sale of shared facilities lifted it, partly offset by lower development, procurement and construction revenue, the company said.

Operating profit fell 8.8% to SAR 2.55 billion. Contributions from operations added SAR 344 million, and acquisitions in Saudi Arabia, Bahrain and Kuwait added SAR 290 million.

Those gains were outweighed elsewhere. Development and construction management services, net of development costs, contributed SAR 464 million less than a year earlier, which management attributes mainly to slow progress on project milestones because of geopolitical volatility. It adds that larger projects had lifted that revenue in the 2025 period.

Settlement and refinancing gains were SAR 326 million lower, as the earlier period carried larger settlement and insurance claims, and other items took a further SAR 88 million. Refinancing gains at Noor Energy 1 in the UAE, set out earlier, partly offset that. The investor report puts the net profit and loss impact of the refinancing adjustments at SAR 165 million, at Acwa’s share.

Below operating profit, impairment losses fell by SAR 231 million at the Noor 3 concentrated solar plant in Morocco, where this year’s smaller charge reflects a leak in a molten salt tank that cut generation. Exchange losses, mainly on Moroccan assets, rose by SAR 103 million. Financial charges rose by SAR 49 million on new projects entering operation, while finance income grew by SAR 83 million on better cash management.

Other items, mainly non-controlling interests’ share of the 2025 settlement and refinancing gains, also helped. Nine-month net profit edged up 0.6% to SAR 1.29 billion. Earnings per share eased to SAR 1.68 from SAR 1.71; the announcement’s explanations cover revenue and net profit only.

The adjusted measure moves the other way. Adjusted net profit fell 16.0% to SAR 1.30 billion. For the 2025 period, the company added back SAR 263 million of expenses and losses, from an impairment and the termination of a project in Africa, which raised that period’s adjusted base.

Margins narrowed over the nine months. The net margin slipped to 20.7% from 23.8%. The operating margin fell to 40.9% from 52.0%.

Nine-month results (in SAR millions)

Changes as the filing prints them, rounded to one decimal; adjusted net profit is the company’s measure, given in whole millions in its investor report.

Adjustments to net profit (in SAR millions)

Positive figures are added back to reported net profit, negative figures deducted. The 2025 comparatives exclude the Rabigh 3 hedge termination item, which the company stopped treating as an adjustment once that refinancing completed in the fourth quarter of 2025. Rows are rounded to whole millions as the company prints them and may not add to the printed net totals: the 2025 rows sum to 264 against 263, and the 2026 nine-month rows to 8 against 9.

The third quarter supplies 49.3% of nine-month profit

The third quarter’s 49.3% share of nine-month net profit came on 35.3% of nine-month revenue. The quarter’s net margin reached 28.8%, up from 22.4% a year earlier. In the second quarter it was 15.3%.

Equity attributable to shareholders, excluding minority interests, rose 19.3% on the year to SAR 33.65 billion. Total assets stood at SAR 78.52 billion at 30 September, against SAR 70.06 billion at the end of 2025, the interim financial statements show. Total comprehensive income attributable to shareholders was SAR 3.95 billion in the quarter, against a loss of SAR 208.2 million a year earlier. The announcement gives the total without itemising the other comprehensive income behind the SAR 3.32 billion gap to net profit.

Parent operating cash flow and parent net debt, two of the company’s own key measures, are reported semi-annually and are not in this report.

The board’s dividend for 2025 was SAR 0.46 a share, or SAR 352.5 million in all. Shareholders approved it on 25 August, and it was paid on 9 September. Chief executive Dr. Samir J. Serhan wrote that the company remains committed to its 2026 to 2030 dividend framework.

Four projects reach financial close as operating capacity grows

At 30 September Acwa managed 112 assets in 16 countries. Serhan put assets under management at an estimated SAR 478 billion, which the investor report’s portfolio table gives as the total investment cost of all 112 assets, a measure distinct from the consolidated total assets above. The portfolio carries 98.2 GW of power generation capacity, of which renewables make up 53.3%.

Of the portfolio, 44.3 GW of power and 6.9 million cubic meters a day of desalination capacity are operational. A further 29 projects are under construction, carrying 46.2 GW of power capacity.

Four projects reached financial close in the nine months, with a total investment cost of SAR 19.2 billion. The largest is the Rabigh 2 IPP Expansion in Saudi Arabia, at SAR 11.6 billion. It accounts for 60.4% of the total, and the other three projects are in Uzbekistan.

The company says it secured three of the four competitively awarded battery storage projects in Saudi Arabia during the period. Power availability improved to 93.5% from 92.1%, which the report puts down to fewer forced outages. Desalination availability was 98.6%, against 98.7% a year earlier.

The report also states that certain Group facilities in the region were targeted in attacks during the period, and that the company is still assessing the operational, contractual and financial implications.

After the quarter, Acwa signed a joint venture agreement with EIG for US power generation and storage assets, and a water purchase agreement with Dubai Electricity and Water Authority for the expansion of the Hassyan seawater desalination plant; both were set out earlier.

Figures are from Acwa Power Company’s interim results announcement for the period ended 30 September 2026 and its investor report for the three and nine months, both filed on the Saudi Exchange on 5 November 2026, and its interim condensed consolidated financial statements for the period (reviewed by KPMG, dated 5 November 2026) on acwapower.com; percentages, margins and shares not attributed to a source are The Edge’s calculations.

Sources: Acwa Power Company, Saudi Exchange, The Edge.

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