DEWA sees revenue increase in first half of 2024, but profit declines

Dubai Electricity and Water Authority PJSC (ISIN: AED001801011), commonly known as DEWA, has announced its consolidated financial results for the first half of 2024. The Emirate of Dubai‘s sole provider of electricity and water services, listed on the Dubai Financial Market, achieved a historic revenue of AED 13.7 billion for the period, reflecting a notable 7.3% increase compared to the same period in 2023.

Revenue Growth and Profit Challenges

DEWA’s revenue growth was propelled by rising demand for electricity, water, and cooling services across Dubai. However, this strong revenue performance came with a 6.7% decrease in net profit, which dropped to AED 2.6 billion. This decline is attributed to the introduction of corporate tax in 2024 and increased depreciation costs. In the second quarter alone, DEWA’s revenue surged by 7.8% to AED 7.9 billion. EBITDA also experienced an 8.8% increase, reaching AED 4.0 billion, while Profit Before Tax rose by 5.9% to AED 2.1 billion.

Expansion in Power Generation and Renewable Energy

DEWA’s gross power generation for the first half of 2024 reached 25.5 TWh, a 6.7% increase from the 23.9 TWh generated in the first half of 2023. This growth highlights DEWA’s expansion in both traditional and renewable energy sources. Of the total power generation, 3.3 TWh was sourced from green energy, accounting for 12.9% of the overall production. DEWA’s installed generation capacity as of mid-2024 stands at 16.779 GW, including 2.86 GW dedicated to renewable energy. This marks a significant investment in sustainable energy, aligning with Dubai’s goals for reducing carbon emissions and increasing the share of renewable energy in its power mix.

Growth in Customer Base and Water Production

By June 30, 2024, DEWA had 1,236,845 electricity and water customer accounts, reflecting a 4.4% increase from the previous year. The total desalinated water production for the first half of 2024 reached 71.3 billion Imperial Gallons, up by 4.3% from the same period in 2023. The company’s desalinated water production capacity remains steady at 495 MIGD. This stability in water production capacity is crucial for meeting the growing demand in Dubai, a city known for its arid climate and high water consumption rates.

Strategic Initiatives and Future Outlook

DEWA’s performance underscores its strategic focus on expanding both its energy generation capacity and customer base. The company’s investment in renewable energy is part of a broader strategy to support Dubai’s ambitious sustainability targets. Dubai aims to produce 100% of its electricity from clean energy sources by 2050, as outlined in its Dubai Clean Energy Strategy 2050. DEWA’s initiatives are pivotal in achieving these goals, enhancing its role as a leader in energy transition in the region.

Expert Insight

Dr. Ahmed Al-Shehhi, an energy economics expert, commented on DEWA’s performance: “DEWA’s revenue growth amidst increased operational costs and new tax regulations highlights the complex financial landscape facing utility companies. While the drop in profit is concerning, the company’s commitment to renewable energy and its growing customer base are positive indicators for long-term sustainability.”

DEWA’s first-half 2024 results reveal a dynamic period of growth and adaptation. Despite challenges related to new taxation and depreciation, the company’s record revenue and increased power generation underscore its robust market position and commitment to sustainability. As DEWA continues to expand its renewable energy portfolio and customer base, it remains a central player in Dubai’s energy landscape.