Financial review

Financial highlights 2024Variances represent the  year‑on‑year variance as at and for the  year ended December 31 2024, vs December 31 2023.

Operating income before impairment loss and other expenses
1 2983 0.1%  mn
Consolidated Net Profit attributable to equity holders of parent
1 1757 5.7% mn
Parent Operating Cash Flow (POCF)
1 2842 15.9%  mn
Equity commitments
1 7.4 27% billion
Parent net leverage to (POCF) ratio
1 6.4 0.9x x

The financial results and position demonstrated continued stability while we accelerated our growth.

Operating income before impairment losses and other expenses reached 2,983 million and net profit attributable to equity holders of the parent increased by 5.7% to 1,757 million, reflecting contributions from newly operational projects, efficient cost management, and enhanced financial optimisation.

Parent Operating Cash Flow (POCF) rose by 15.9% to 2,842 million, supported by increased inflows from development activities and capital recycling. Parent net leverage stood at 18.1 billion as of 31 December 2024.

Introduction

This section provides an analytical review of the financial results of ACWA Power for the three‑months and full year ended 31 December 2024, and it should be read in conjunction with the Company’s Audited Consolidated Financial Statements and Independent Auditor’s Review Report for the year ended 31 December 2024 issued by KPMG Professional Services (Certified Public Accountants) (the ‘Audited Financial Statements’).

All amounts are in million, rounded up to one decimal point, unless stated herein otherwise. Percentages have also been rounded up to the available number of digits presented in the tables, when applicable. A calculation of the percentage increase/decrease based on the amounts presented in the tables may not therefore be exactly equal to the corresponding percentages as stated.

‘Current Quarter’ or ‘4Q2024’ or ‘the fourth quarter of 2024’ corresponds to the three‑months period ended 31 December 2024 whereas ‘previous quarter’ or ‘4Q2023’ or ‘the fourth quarter of 2023’ corresponds to the three‑months period ended 31 December 2023. ‘2024’ or ‘2023’ corresponds to the full year ended 31 December of the year mentioned. ‘Current year’ corresponds to 2024 whereas ‘current period’ corresponds to either 2024 or Q4 2024 depending on the context where it is used.

In the Audited Financial Statements, certain figures for the prior periods have been reclassified to conform to the presentation in the current period.

This section may contain data and statements of a forward‑looking nature that may entail risks and uncertainties. The Company’s actual results could differ materially from those expressed or implied in such data and statements as a result of various factors.

Key factors affecting the comparability of operational and financial results between reporting periods

Although the Company’s business model of Develop, Invest, Operate, and Optimise allows it to generate and capture returns over the full life cycle of a project, these returns may differ from one reporting period to another, depending on the number of projects in the Company’s portfolio and where these projects are in their project life cycles (i.e., in advanced development, under construction or in operation). Projects achieving financial close (‘FC’) and projects achieving either initial or project commercial operation dates (‘ICOD’ or ‘PCOD’ respectively) are typical examples that may lead to such variances in the values presented on the financial statements from one period to another, potentially rendering analysis of these variations unreasonable without additional information. The Company considers this or similar type of transactions as ‘ordinary course of business’. Accordingly, the financial value of these transactions does not lead to any financial adjustment to the Company’s reported consolidated net profit for the period attributable to equity holders of the parent (‘Reported Net Profit’).

In addition to the above, there may be transactions that the management would consider as non‑routine or non‑operational as they are either one‑off and not expected to recur in the future or are unusual in nature. The impact of such transactions on the Reported Net Profit are adjusted in the respective period of their realisations to arrive at adjusted net profit attributable to equity holders of the parent (‘Adjusted Net Profit’) for the concerned period.

Material ordinary‑course‑of‑business transactions that did not result in adjustment to the Reported Net Profit for the year ended 31 December 2024

Projects achieving financial close (FC)

Typically, a project company achieves its FC when it has access to funding from its lenders, and the Company normally becomes entitled to recognise business development revenue from the project company and recover the project development and bidding costs incurred to date, including reversal of any related provisions. Moreover, the Company typically earns additional service fees such as project and construction management fees, which are recognised during the construction period of the project based on pre‑determined milestones.

The following table lists all projects that achieved their respective FCs in the past 24 months to 31 December 2024.

Financial ClosesACWA Power’s effective share and accounting type as at the time shown under Month column of the table. ACWA Power’s effective shareholding as well as the accounting type as at 31 December 2024 may be different. in the past 24 months (Jan 2023 – December 2024)
Month ProjectEquity accounted investee (EAI) or Subsidiary (SUB). Location Total investment cost billion Contracted gross capacity (water in thousands) Accounting typeACWA Power’s effective share and accounting type as at the time shown under Month column of the table. ACWA Power’s effective shareholding as well as the accounting type as at 31 December 2024 may be different.
Equity accounted investee (EAI) or Subsidiary (SUB).
ACWA Power’s effective ownershipACWA Power’s effective share and accounting type as at the time shown under Month column of the table. ACWA Power’s effective shareholding as well as the accounting type as at 31 December 2024 may be different.
DURING 2024
1 Dec’24 Suez Wind Egypt 4.1 1100 MW SUB 100.00%
2 Nov’24 Azerbaijan wind IPP Azerbaijan 1.1 240 MW SUB 100.00%
3 Oct’24 Nukus (Karatau) Wind IP Uzbekistan 0.4 100 MW SUB 100.00%
4 Sep’24 PIF 4 Al‑Muwaih Solar PV Saudi Arabia 4.4 2,000 MW EAI 35.10%
5 Sep’24 PIF 4 Haden Solar PV Saudi Arabia 4.4 2,000 MW EAI 35.10%
6 Sep’24 PIF 4 Al‑Khushaybi Solar PV Saudi Arabia 3.5 1,500 MW EAI 35.10%
7 July’24 Taibah 1 IPP Saudi Arabia 6.7 1,934 MW EAI 40.00%
8 July’24 Qassim 1 IPP Saudi Arabia 6.6 1,896 MW EAI 40.00%
9 Mar’24 Hassyan IWP UAE 3.4 818 m3/day EAI 20.40%
Total 10,770 MW, 818 m3/day 34.6
DURING 2023
1 Nov’23 PIF3‑Al‑Kahfah solar PV IPP Saudi Arabia 3.9 1,425 MW EAI 50.10%
2 Nov’23 PIF3‑Ar Rass2 solar PV IPP Saudi Arabia 5.3 2,000 MW EAI 50.10%
3 Nov’23 PIF3‑Saad2 solar PV IPP Saudi Arabia 3.0 1,125 MW EAI 50.10%
4 Sep’23 Rabigh 4 IWP Saudi Arabia 2.5 600 m3/day EAI 45.00%
5 Aug’23 Layla PV IPP Saudi Arabia 0.4 80 MW EAI 40.10%
6 July’23 Al Shuaibah PV 1 & 2 Saudi Arabia 8.3 2,631 MW EAI 35.01%
7 Apr’23 Kom Ombo PV Egypt 0.6 200 MW SUB 100.00%
8 Mar’23 NEOM Green Hydrogen Company Saudi Arabia 31.9 3,883 MW; 220K tonnes/ per year EAI 33.33%
9 Feb’23 Ar Rass PV IPP Saudi Arabia 1.7 700 MW EAI 40.10%
Source: Company information
Projects achieving initial or project commercial operation dates (ICOD or PCOD)

A project starts providing power and/or water, partially or fully, under its offtake agreement in the year it achieves either ICOD or PCOD and begins recognising revenue and charging costs into the profit or loss statement. It is typically at this stage that NOMAC starts recognising its stable and visible O&M fees too.

Depending on its effective ownership and control relationship in the project, the Company either consolidates the financial results of the project (subsidiary) or recognises its share of net income in the project (equity accounted investee) within the Company’s consolidated financial statements. When the project company becomes eligible to distribute dividends and when such dividends are declared, the Company additionally receives dividends in proportion to its effective share in the project.

The following table lists all projects that achieved their respective ICOD or PCOD and thus have begun contributing to the Company’s results in the past 24 months to 31 December 2024.

ICOD/PCOD in the past 24 months (Jan 2023 – December 2024)
ICOD/PCODSome projects may not have reached their full operational capacity and obtained official certificate of full commercial operations from the offtaker yet. Project Location Online CapacityOnline capacity that is in operation as at the stated ICOD/PCOD date. (water in thousands) Remaining capacity to bring online Accounting type ACWA Power’s effective shareACWA Power’s effective share as at 31 December 2024. Note that the current effective shareholding may be different.
DURING 2024
Dec‑24 Sirdarya CCGT Uzbekistan 1500 MW EAI 51.00%
Nov‑24 Al Shuaibah 1 Saudi Arabia 600 MW EAI 35.01%
Nov‑24 Riverside Solar Project Uzbekistan 200 MW BESS: 770 MWH EAI 51.00%
Aug‑24 AlRass1 Saudi Arabia 700 MW EAI 40.10%
Jun‑24 Kom Ombo PV Egypt 200 MW SUB 100.00%
Mar‑24 Al Taweelah IWP UAE 909 m3/day EAI 40.00%
Feb‑24 Noor Energy 1 UAE 950 MW EAI 25.00%
Jan‑24 Sirdarya CCGT Uzbekistan 918 MW 582 MW EAI 51.00%
Jan‑24 Sudair PV(Group3) Saudi Arabia 1,500 MW EAI 35.00%
DURING 2023
Nov‑23 Hassyan IPP UAE 2,400 MW EAI 26.95%
Nov‑23 Noor Energy 1 (PT Unit) 200MW UAE 717 MW 233 MW EAI 25.00%
Oct‑23 Sudair PV (Group2) Saudi Arabia 1,125 MW 375 MW EAI 35.00%
Sep‑23 Sudair PV (Group1) Saudi Arabia 750 MW 750 MW EAI 35.00%
Jun‑23 Shuaa Energy 3 PV UAE 900 MW EAI 24.00%
Apr‑23 Al Taweelah IWP UAE 833 m3/day 76 m3/day EAI 40.00%
Mar‑23 Hassyan IPP (Unit 3) UAE 1,800 MW 600 MW EAI 26.95%
Feb‑23 Jazlah IWP (Jubail 3A) Saudi Arabia 600 m3/day EAI 40.20%
Feb‑23 Noor Energy 1 (CT Unit) 100MW UAE 517 MW 433 MW EAI 25.00%
Jan‑23 Jizan IGCC Saudi Arabia Approx. 3,040MW Power 760 MW EAI 21.25%
Jan‑23 Noor Energy 1 (PT Unit) 200MW UAE 417 MW 533 MW EAI 25.00%
Source: Company information
Dividends, Bonus Shares and Rights Issuance
Dividends 2023

On 28 February 2024, the Board of Directors approved a cash dividend distribution of 329.0 million (0.45 per share) for the year 2023, payable in 2024. The proposed dividends were approved by the shareholders at the extraordinary general assembly meeting held on 29 April 2024 and paid on 13 May 2024.

Bonus Shares

On 28 February 2024, the Board of Directors also recommended to increase the Company’s capital by granting bonus shares to the Company’s shareholders through capitalisation of 14.6 million from the retained earnings by granting 1 share for every 500 shares owned. The bonus share issuance was approved by the shareholders at the extraordinary general assembly meeting held on 29 April 2024 and distribution of shares has been completed on 2 May 2024 followed by the distribution of the proceeds from the liquidation of fractional shares which was completed on 29 May 2024. Consequently, the share capital increased from 7,310,997,290 to 7,325,619,280.

Capital raise via rights issue

On 10 June 2024, the Board of Directors recommended to increase the Company’s capital by 1 7,125 million through the offering of a Rights Issue (‘Rights Issue’), to allow the Company to anchor its growth strategy of tripling the assets under management by 2030 and enhance its financial position. In parallel with its new growth projections the Company estimates its average annual equity commitment between 2024 and 2030 to significantly increase to $2B‑$2.5B per year from the earlier range of $1B‑$1.3B per year.

The Board of Director’s recommendation is subject to the approval of the relevant regulatory authorities and ACWA Power’s shareholders at the extraordinary general assembly. On the 18th of December 2024, the Company submitted the application file to the Capital Market Authority, and it is now being reviewed. The Company is in the process of completing its application with the regulatory agency for the rights issue.

Acquisition of operational wind power plant in China

On 27 December 2024, the Group completed the acquisition of 100% shares in Xinyang Mingxi New Energy Co. Ltd., the owner of a 100 MW operational wind power plant in China, for a total consideration of 80.9 million. Management assessed the transaction and concluded that it qualifies as an asset acquisition rather than a business combination as defined by IFRS 3. The acquisition has been accounted for in accordance with IFRS standards applicable to asset acquisitions.

The consideration paid so far is 51.4 million, and the remaining 29.5 million will be settled upon completion of certain conditions specified in the Share Purchase Agreement (SPA).

Divestments

Financial optimisation – typically in the form of equity divestments or project refinancings – is a core element of the Company’s business model that provides the Company with an opportunity to improve its returns and recycle its cash for further investment. The Company therefore actively seeks to identify, and capture, if beneficial circumstances prevail, opportunities as part of its ordinary course of business.

Bash and Dzhankeldy 1GW wind projects in Uzbekistan

On 7 July 2023, ACWA Power (through its wholly owned subsidiary) entered into a Sale Purchase Agreement (‘SPA’) for the sale of a 35% stake in ACWA Power Bash Wind Project Holding Company and ACWA Power Uzbekistan Wind Project Holding Company Limited (‘the Investee Companies’). Investee Companies respectively hold 100% share in the project companies relating to Bash 500 MW and Dzhankeldy 500 MW wind projects in Uzbekistan.

All substantive condition precedents (‘CPs’) in relation to the transaction were completed before the issuance of these consolidated financial statements, following which ACWA Power’s share reduced to 65% in each of the project companies.

As a result of the transaction, ACWA Power now jointly controls the decisions for the relevant activities that most significantly affect the returns of the Investee Companies together with the Project Companies. Consequently, ACWA Power lost control and recognised a gain of 401.7 million. As of the date of loss of control, ACWA Power has started to account for the Investee Companies using the equity method of accounting in accordance with the requirements of IFRS 11 – Joint Arrangements.

Rabigh Arabian Water and Electricity Company (RAWEC)

RAWEC is an independent water, steam & power producer, supplying essential utilities on a captive basis to Petro Rabigh Company in Saudi Arabia as the offtaker under a long‑term offtake agreement.

On 3 June 2024, ACWA Power (through its wholly owned subsidiary) entered into a Sale Purchase Agreement (‘SPA’) with Hassana Investment Company for the sale of a 30% stake in its wholly owned subsidiary RAWEC without loss of control for an aggregate consideration of 835.1 million. Legal formalities with respect to this transaction were completed during the year ended 31 December 2024. The Group recognised an increase in non‑controlling interests (‘NCI’) of 755.9 million and an increase in equity attributable to owners of the parent of 51.3 million. The difference between the carrying amount of RAWEC sold and the consideration received is recorded directly within equity.

ACWA Power effectively holds 69% shareholding in the project after the sale transaction.

Long term incentive plan (LTIP) and share buy‑back

In 2023, the Board of Directors approved to replace the then existing cash‑based LTIP with a share‑based incentive plan (hereinafter referred as the ‘Employees Stock Incentive Program’ or the ‘Program’). In this regard, the shareholders of the Company approved the proposed buy‑back of the Company’s shares with a maximum of two (2) million shares during the extraordinary general assembly on 22 June 2023.

During the year, the Company purchased 391,200 shares amounting to 118.0 million at prevailing market rates. The Group has recognised these shares within treasury shares in the consolidated statement of changes in equity.

The Group recognised Provision for long term incentive plan of 82.3 million within general and administration expenses during the year.

Material transactions that resulted in adjustment to the Reported Net Profit for the year ended 31 December 2024

There were two transactions/updates in the Current Quarter that resulted in adjustment to the Reported Net Profit for the Current Quarter

Barka Impairment Reversal

Barka is a subsidiary of the Company, comprising one power and three water desalination plants. Following the expiry of the corresponding PWPA contracts in 2021, management recognised a partial impairment on the power plant and a full impairment on the water desalination plants before 2024. In April 2024, Barka has successfully renewed contracts for both power and water. Accordingly, the company has reversed impairment amounting to 282 million (ACWA Power share 119 million).

Impairment loss in Noor 3 CSP IPP (“Noor 3”) in Morocco

During 1Q2024, the Noor 3 CSP plant in Morocco experienced a technical issue in the molten salt tank and resulted in an extended forced outage that is expected to last till the end of the first quarter of 2025. This event triggered a re‑assessment of recoverability of finance lease receivables, and the project company has recognised an impairment loss of 191.6 million in 2024 (ACWA Power share 143.7 million).

ACWA GuC Debt restructuring

ACWA Guc is a 950 MW combined‑cycle gas turbine power plant (the ‘Plant’) situated in Kirikkale, Turkey. The Plant achieved Commercial Operation Date (‘COD’) in 2017 and 100% owned and fully consolidated by ACWA Power (the ‘Group’) until 2018. Turkey operates on a merchant basis, and Kirikkale sells electricity and capacity through bilateral contracts and participation in the balancing/day‑ahead market.

After reaching COD, the Plant experienced significant operational and currency exchange losses due to foreign currency denominated project debts, aggravated by a downturn in the Turkish economy and the depreciation of the Turkish Lira against the US Dollar. In 2018, the Group divested 30% of its shareholding in the project company and fully impaired its investment, which resulted in recognised losses of 1.5 billion and loss of control over the Project Company. In accordance with the accounting standards, it ceased to recognise its share of profits or losses from the Project Company thereafter.

In August 2024, ACWA Power and its related subsidiary entities have reached an agreement with the lenders of ACWA Guc and its minority shareholders (‘Transaction’), whereby the lenders agreed to settle their outstanding loan, with one of the lenders agreeing to become a shareholder of ACWA Guc under certain shareholding agreements and convertibility conditions. Accordingly, the outstanding debt of approximately 2,317.0 million has been purchased by the shareholders at a consideration payable in three years of 731.0 million, of which ACWA Power’s share was 496.7 million.

As a result of the restructuring, the Group’s effective shareholding in the Project Company has marginally increased to 73.0%. The Group continues to equity account for its interest in the Project Company based on the new shareholding agreement.

This restructuring improved the Project Company’s net asset position and resulted in a gain reinstatement of net investment in the Project Company by 1.2 billion at the Group level due to equity accounting of Project Company’s net assets. However, concurrently the Group conducted a recoverability assessment of its net investment in the Project Company and after considering various factors affecting the recoverability have written down the investment in the Project Company to 0.9 billion. The net impact has been reflected within the share of net results of equity accounted investees in these consolidated financial statements.

Termination of project in Africa

In December 2023, the Company has signed a PPA for the development of a 150MW Solar PV together with BESS in Africa. The completion of the conditions precedent of the financing arrangements have extended beyond the stipulated long‑stop dates of the relevant contract by less than a month. In line with the generally accepted practices in typical PPP environments, the Company applied for extension of the date or Amendments and Reinstatement of the PPA, which was surprisingly and unexpectedly rejected by the offtaker. Since the underlying forecast transactions are no longer considered highly probable, the company has reclassified the cumulative balance of hedge reserve, MTM movement to reporting date along with the project development costs to profit or loss at an aggregate net amount of 272 million.

Income in relation to termination of some Pre‑hedging instruments

The Group, in accordance with financing documents, enters into interest rate swap (IRS) agreements to hedge against the risk of interest rate movements and accordingly applies cashflow hedge accounting as per the IFRS. In certain cases, such IRS may be acquired before the financial close at the time of the signing of the power or water purchase agreements based on the Company’s forecast of probable interest rates at the time of the financial close to hedge against the interest rate volatility between signing of the purchase agreement and the financial close (pre‑hedge).

During the current period, the Company has recycled certain hedge reserves upon discontinuation of pre‑hedging contracts (the ‘Interest Rate Swaps’), as the underlying highly probable forecast transaction is no longer expected to occur within the Group due to expected divestment, amounting to 313.4 million. At the inception of the Interest Rate Swaps, it is not the management’s intention to do early termination. This action was necessitated by the anticipated non‑occurrence of the underlying highly probable forecast transactions within the Group, attributed to expected divestments, and significant modifications to the hedged risk. Consequently, the management does not expect that the discontinuation of such Interest Rate Swaps will be a recurrent event.

Discussion and analysis of management’s key financial indicators

ACWA Power’s management uses several key performance metrics to review its financial performance. These metrics and their typical reporting frequencies are listed below followed by the management’s discussion and analysis for the current period.

Key financial performance indicator Typical MD&A Reporting frequency IFRS / non‑IFRS
Operating income before impairment loss and other expenses Quarterly IFRS
Consolidated Net profit attributable to equity holders of parent Quarterly IFRS
Parent Operating Cash Flow (POCF) Semi‑annually Non‑IFRS
Parent Net Debt and Net Debt Ratio Semi‑annually Non‑IFRS

Operating income before impairment loss and other expenses

Operating income before impairment loss and other expenses represents ACWA Power’s consolidated operating income before impairment loss and other expenses for the continuing operations and includes ACWA Power’s share in net income of its equity accounted investees.

in Millions Fourth Quarter (4Q) YTD December 2024
2024 2023 % change 2024 2023 % change
Operating Income before impairment loss and other expenses 618 878 −29.6% 2,983 2,981 0.1%
Source: Reviewed financial statements
For the year ended 31 December 2024 (‘2024’)

Operating income before impairment loss and other expenses for 2024 was 2,983 million.

Operating incomeBefore impairment loss and other expenses. Variance 12M24 versus 12M23 – million
Source: Company information

Main variance drivers were:

  • Gains recognised on account of divestment of Bash & Dzhankeldy in 2Q24 (402 million) (refer to Financial review section and the section on Bash and Dzhankeldy 1GW wind projects in Uzbekistan) and debt restructuring of ACWA GuC in 3Q24 368 million, net of impairment charges) (refer to Financial review section and the section on ACWA GuC Debt restructuring) were the main drivers of the increase in operating income.

This increase was totally negated by

  • Lower development business and construction management services revenue and higher development cost provision/write off (please refer to section 2.2.4 Termination of Project in Africa) (in aggregate,362 million);
  • Higher general and administration cost and others mainly due to hiring of new staff including new employee benefit schemes, staff training in line with the accelerated growth strategy, and additional provisions on disputed receivable (in aggregate, 334 million); and
  • Net lower contribution from projects mainly due to outages in certain plants and higher operation and maintenance costs (72 million).

Consolidated net profit attributable to equity holders of parent

Consolidated net profit attributable to equity holders of parent (‘Net Profit’) represents the consolidated net profit for the period attributable to equity holders of the parent.

3 in millions Fourth Quarter (4Q) YTD December 2024
2024 2023 % change 2024 2023 % change
Profit attributable to equity holders of the parent (“Reported Net Profit”) 502 580 −13.4% 1,757 1,662 5.7%
Source: Reviewed financial statements

Net Profit for 2024 was 1,757 million and 5.7%, or 95 million, higher than 1,662 million for 2023.

Consolidated Net ProfitAttributable to equity holders of the parent. Variance 12M2024 versus 12M2023 – million
Source: Company information.

Main variance drivers were:

  • Higher income due to better cash management (212 million), mainly on account of higher finance income (86 million), lower finance charges (130 million) mainly due to better cash management, MTM hedge gain and payment of scheduled loan installments;
  • Impairment loss and other expenses, net 29 million mainly on account of reversal of impairment Barka plant 282 million (Please refer section on Barka impairment reversal) partially offset by recognition of impairment at Noor 3 191 million (Please refer section 2.2.2 Impairment loss in Noor 3 CSP IPP (‘Noor 3’) in Morocco), higher CSR and provision for arbitration/legal claims and settlements amounting to 61 million.

Above were partially offset by:

  • Increase in non‑controlling interest (NCI) is primarily driven by reversal of impairment on Barka (Please refer section 2.2.1 on Barka impairment reversal) as well as 30% stake sold in RAWEC (Please refer section 2.1.5 on divestment of Rabigh Arabian Water and Electricity Company (‘RAWEC’) resulting in higher NCI from Q4 2024;
  • Others (27 million in aggregate): mainly lower other income (29 million) mostly due to recognition of gain on fair value of derivative in 2023.
Adjusted profit attributable to equity holders of the parent

Adjusted profit attributable to equity holders of parent (‘Adjusted Net Profit’) represents profit after adjusting the Reported Net Profit for the financial impact of non‑routine, unusual or non‑operational items.

There were four transactions that the management considered for adjustment in 2024. Including these transactions, the 2024 bridge between the reported and adjusted net profit is as follows:

in Millions Fourth Quarter (Q4) YTD December 2024
2024 2023 % change 2024 2023 % change
Profit attributable to equity holders of the parent (‘Reported Net Profit’) 502 580 −13% 1,757 1,662 5.7%
ADJUSTMENTS:
Impairment Loss, net (A) (84) 25
Termination of hedging instruments (B) (313)
ACWA Guc debt restructuring Gain (C) (368)
Termination of Project in Africa (D) (157) 272
Net adjustments (241) (385)
Adjusted profit attributable to equity holders of the parent (‘Adjusted net profit’) 261 580 55.00% 1,373 1,662 17.4%
Source: Reviewed financial statements

(A) Impairment loss, net represents Impairment loss reversal in Barka amounting to 119 million (ACWA Power share) (please refer to section on 2.2.1 Barka impairment reversal) and Impairment loss in Noor 3 CSP IPP (‘Noor 3’) in Morocco amounting to 144 million (ACWA Power share). Please refer to section 2.2.2 Impairment loss in Noor 3 CSP IPP (‘Noor 3’) in Morocco.

(B) Termination of hedging instruments represents gain on discontinuation of pre‑hedging contracts in 2Q2024. Please refer to section 2.2.5 Income in relation to termination of some hedging instruments.

(C) For details on ACWA GUC debt restructuring gain, please refer to section 2.2.3 ACWA GuC Debt restructuring.

(D) For details on Termination of Project in Africa, please refer to section Termination of Project in Africa.

Parent operating cash flow (POCF)

POCF represents parent level, or corporate, operating cash and comprises 1) distributions from the project companies and NOMAC; 2) development, construction management and other fee revenues; 3) cash generated by financial optimisation activities including partial and/or full divestments of the Company’s investments, and by refinancings. These cash flows are then reduced by corporate general, administrative expenses, Zakat and tax expenses and capital expenditures as well as the financial expenses related to the ACWA39 non‑recourse bond.

Parent Operating Cash Flow (‘POCF’) YTD December 2024
in Millions
2024 2023 % change
Distributions 1,254 1,461 −14.2%
Development business construction management service and other fees and services 1,930 1,904 1.4%
Capital recycling 861 74 1066.8%
Total cash inflow 4,045 3,438 17.6%
Total cash outflow (1,203) (985) 22.1%
Total parent operating cash flow 2,842 2,453 15.9%
Total discretionary cash 7,658 9,089 ‑15.7%
Total uses of cash (5,066) (4,376) 15.8%
Year end cash balance 2,592 4,713 45.0%
Source: Company information

POCF for 2024 was 2,842 million and 15.9%, or 389 million, higher than 2,453 million in 2023, mainly on account of higher cash inflows of 607 million offset by higher cash outflows of 217 million.

Higher cash inflow was mainly due to cash proceeds on account of 30% stake sale in RAWEC (please refer to section 2.1.5 Rabigh Arabian Water and Electricity Company (‘RAWEC’)) which was partially offset by lower distribution from projects mainly on account of outages and maintenance activity.

Total cash outflow was higher by 22.1%, mainly on account of higher staff costs reflecting business growth in line with the Company’s new Strategy 2.0, and higher financial expenses on non‑recourse ACWA39 bond due to schedule principal payments.

Total discretionary cash (TDC) and year end cash

Total Discretionary Cash comprises the corporate opening cash for the current year, the POCF and new equity or debt capital raised by the Company, if any, and represents the cash available for the Company’s investment commitments, corporate debt servicing and dividends.

TDC for 2024 was 7,658 million and 15.7%, or 1,431 million, lower than 9,089 million of 2023, mainly owing to the proceeds from Sukuk issued in 2023 in addition to other drawdowns, which more than offset the positive impact of higher POCF (see above).

During 2024, the Company used 5,066 million of its available TDC for: 1) the debt service of 1,243 million (including service of both tranches of Sukuk and the repayment of facilities of 776 million); 2) dividend payment of 328 million for the year 2023; 3) cash investments in its projects at an aggregate amount of 2,146 million; 4) share buy‑back of 118 million (please refer to section 2.1.6 Long term incentive plan (LTIP) and share buy‑back); and 5) aggregate net cash outflows for limited notices to proceed, other advances and project development costs, net of any advances collected, of 1,230 million.

Total year‑end corporate or parent‑level cash on 31 December 2024 stood at 2,592 million and was 45.0%, or 2,121 million, lower than the year‑end cash balance on 31 December 2023.

Parent level leverage

Parent level, or corporate, leverage consists of 1) borrowings with recourse to the parent (the Company); 2) off‑balance sheet guarantees in relation to the Equity Bridge Loans (EBLs) and other equity‑related commitments including Equity Letters of Credit; and 3) options entered with lenders of mezzanine debt facilities by the Company’s JVs or subsidiaries. Parent level net leverage represents parent level leverage net off the parent total year‑end cash balance.

in million
31‑Dec‑24 31‑Dec‑23 % change
Corporate borrowings 4,590 4,588 0.1%
Project recourse borrowings 4,046 4,976 ‑18.7%
Other financial liabilities 806 772 4.4%
Total on‑balance sheet leverage 9,442 10,336 8.6%
Guarantees in relation to equity letter of credits & EBL 10,624 7,271 46.1%
Other equity commitments 598 598 0.0%
Total off‑balance sheet leverage 11,222 7,869 42.6%
Total parent leverage 20,664 18,204 13.5%
Less: year end cash balance (2,592) (4,713) ‑45.0%
Parent net leverage 18,072 13,491 34.0%
Net tangible equityEquity attributable to owners of the Company before other reserves, net of intangible assets such as Goodwill, and project development costs. 16,123 14,713 9.6%
Parent net leverage to POCF ratio 6.36x 5.50x 0.86%
Parent net leverage to Net tangible equity ratio 1.12x 0.92x 0.20x
Source: audited financial statements and Company information

Parent Net Leverage stood at 18,072 million as of 31 December 2024 and was 34.0%, or 4,581 million, higher than 13,491 million as of 31 December 2023, driven mainly by higher off‑balance sheet indebtedness and lower year‑end cash balance partially offset by lower on‑balance sheet indebtedness.

Total on‑balance sheet leverage stood at 9,442 million and was (8.6)%, or 893 million, lower than 10,336 million as of 31 December 2023.

Corporate borrowings at 4,590 million comprise Sukuk and corporate revolving facilities (CRF). There is no major variance in corporate borrowings. Project recourse borrowings stood at 4,046 million and represent the borrowings by the Company’s projects with recourse to the Company. The reduction was mainly driven by the minority stake sale in Bash & Dzhankeldy resulting in the projects to be accounted as equity method (please refer to section Bash and Dzhankeldy 1GW wind projects in Uzbekistan) including repayment of one of the facilities, which was partially offset by higher borrowing at projects which are under construction.

Total off‑balance sheet leverage stood at 11,222 million and was 42.6%, or 3,353 million, higher than 7,869 million as of 31 December 2023, owing to the Company’s higher EBL or other equity‑related commitments in parallel with the increased equity investment levels for projects mainly KSA.

Leverage ratios

The Company’s management monitors two ratios with respect to its net leverage position, namely Parent Net Leverage to POCF ratio and Parent Net Leverage to Net Tangible Equity ratio.

The Parent Net Leverage to POCF ratio at 6.36x (times) as of 31 December 2024 was 0.86x higher than the ratio as of 31 December 2023, due to accelerated growth.

Due to higher parent net leverage, the Parent Net Leverage to Net Tangible Equity ratio at 1.12x (times) as of 31 December 2024 was 0.20x higher than the ratio as of 31 December 2023, mainly due to higher parent net leverage as analysed above.

Parent level leverage