(The Group’s Comments) Qatar Water & Electricity Co. Net Profit Down 4.5% to QR1.54 Billion in 2018

Ø  Profit: The company’s profits fell by 4.5% to QR 1,565.2 million by the end of 2018, compared to QR 1,639.5 million by the end of 2017. QWEC’s earnings per share reached QR13.97, versus QR14.69 in 2017. The fourth quarter profits showed an improvement of 24.3% compared to the same period in 2017, as the profits for that period amounted to QR 384 million, compared to QR 309 million for the corresponding period of 2017.

Ø  Comprehensive income: the total comprehensive income for 2018 amounted to QR 2,387.8 million, compared to QR 1,592.7 million at the end of 2017. In 2018, the company recorded an estimated profit of QR424 million from the evaluation of cash flow hedges. It also recorded an estimated fair value gain of QR368.6 million.

Ø  Revenues: decreased from QR 3,070.7 million in 2017 to QR 2,601.5 million at the end of 2018, a decline of 16.13%. The following table shows sources of income and the changes they incurred:

Ø  Shareholders’ equity: increased by 16% compared to the previous year to reach QR10.713 billion, compared to QR 9.232 billion at the end of 2017. This increase was due to the lower losses of the valuation of the exchange reserve as well as the increase in the retained earnings.

Ø  Dividends: The Board of Directors recommended to the General Assembly to distribute QR7.75 per share (4.22% dividend yield) as cash dividends for the year 2018, which is the same cash dividends distributed in 2017.

Ø  Market Ratios: The stock is currently traded at a PE multiple of 12.96 times and a book value multiple of 1.86 times.