Qatar Electricity & Water Co.
Qatar Electricity and Water Company (QEWC), a Qatari public shareholding company, is one of the first private sector companies in the region that operates in the field of electricity generation and water desalination. Established in 1990 in accordance with the provisions of the Qatari Commercial Companies Law, its purpose was to own, manage, and sell the products of electricity generation and water desalination plants.
Upon its foundation, the company’s capital was one billion Qatari Riyals divided into one hundred million shares at the value of 10 QR per share. On 25 February 2014, the extraordinary general assembly decided to distribute ten million bonus shares among the shareholders by giving one share for every ten shares. Accordingly, the company capital share became one billion and one hundred million Qatari Riyals that were fully paid divided into one hundred and ten million shares. The Qatari government and its affiliates own approximately 52% of the capital and the rest of the shareholders, companies and individuals, own about 48%. The eleven-member board of directors chaired by H.E. Dr. Mohammed bin Saleh Al-Sada, Minister of Energy and Industry, run the company.
QEWC is the second largest company in the field of power generation and water desalination in the Middle East and North Africa (MENA) region. It is the main supplier for electricity and desalinated water in Qatar with a market share of 62% of electricity and 79% of water. The company generates electricity of 5.432 Megawatt and produces 258 million gallons of water per day. Over the last decade, the company witnessed remarkable growth in alignment with the rapid development of the Qatari economy and the increase of population, which in its turn increased the demand on electricity and water. QEWC revenues increased at a compounded annual growth rate of approximately 10.3%.
The Company’s Projects
The company owns and operates a number of the key electricity generation and water desalination plants.
The company also owns and operates the following sub-stations
Dukhan Desalination Plant: with a capacity of 2 million of water gallons per day.In addition, the company holds share in all domestic electricity generation and water desalination companies as follows:
80% in the Ras Laffan Power Company Limited, which has the capacity of 756 MW of electricity and 40 million gallon of water per day. In addition, QEWC has full ownership of the Ras Laffan Operating Company.
55% in the Qatar Power Company, which has the capacity of 1,025 MW of electricity and 60 million gallon of water per day.
40% in Mesaieed Power Company, which has the capacity of 2,007 MW of electricity.
45% in Ras Girtas Power Company, which is the largest power generation project in the region with a capacity of 2,730 MW of electricity and 63 million gallon of water per day.
60% in Nebras Company.
Attractive Factors and Motivating Characteristics
QEWC is previlaged with an established purchase market and having a low risk profile in the infrastructure and utilities sector in Qatar. The value of the company’s shares are also stable with favorable growth prospects, especially after the significant growth of the national economy and the completion of planned projects outside Qatar. The growing dividend distributions is one of the positive factors that charcterizes the company. QEWC has some attractive and motivating factors and charcterisitics mainly:
The Company provides steady flow of revenue, especially due to the power and water purchase agreements with Qatar General Electricity and Water Corporation (Kahramaa).
The Company has signed long-term fuel supply agreements with QP, which ensures the stability in the cost of production, as fuel cost is the largest single variable component of the cost of production. QP is a major supplier of the world’s natural gas, in normal form or liquefied gas form, which also ensures excellent reliability of gas supply to the company’s power and water desalination plants and high thermal efficiency in conformity with global environmental specifications.
Based on the accumulated experience and reputation gained throughout the last twenty five years, QEWC prospects available expansion opportunities outside Qatar, in MENA region, as well as the East Asia markets. This may increase the evaluation of the company in case of achieving successful projects in such markets.
The Dividend Distribution Policy in line with the profit realized and long term plan, which extends for more than 12 years that’s updated every while, also makes company shares more attractive to investors.
The Company adopts a long-term policy to increase the operating income. The impact of such policies became apparent on the results achieved by the company, thanks to its operating efficiency and optimum control of production costs. QEWC was able to achieve a steady increase in its financial results over the operating years, which enabled it to distribute dividends to its shareholders in annually increasing basis. Such a matter was positively reflected on the price of shares in the local market enabling QEWC to maintain stability and not to be affected by price fluctuations. The company adopted a balanced dividend distribution policy, in order to meet its financial obligations and to enable it to finance its new projects.
QEWC is fully aware of its responsibilities towards society and the citizens in the State of Qatar. It firmly believes in a strong correlation between the company’s business success and its responsibility towards the community. In the context of maintaining its social responsibilities, QEWC management continued such efforts that the company signed an agreement with the Ministry of Interior to act as a supporter and a major sponsor for anti-drug project for a period of five years starting from 2013 and committed to contribute QR 5 million. QEWC is also providing support and donations to a number of health, educational, cultural, artistic, social, humanitarian, and environmental and sports centers and institutions. In addition, it sponsors some scientific and intellectual conferences and symposia that targets the service and development of civil society institutions with their various activities and objectives.
The Company’s Credit Rating
The international corporations of Moody’s and issued their annual credit rating of 2014. QEWC rating was as follows:
Moody’s: A1/ stable (2013 and 2012 was A1)
The company has succeeded to preserve its rating. However, it is working on taking the procedures that help promote its evaluation in the coming years.
Electricity and water production is one of the most significant factors to support and develop the national economy. QEWC is committed to develop and continue its works in accordance with the highest standards and international practices; to sustain the principles of disclosure and transparency to the public and its shareholders; and to attain the highest rates of profits for its shareholders. The company has achieved high-level performances that helped the continuity of its contribution to the effective support to the overall renaissance in the State, a matter that is positively reflected on the results of its revenues and the distributed profits.