Qatar Electricity and Water Company (QEWC) announced the approval of a 25% interim cash dividend for shareholders at its extraordinary general assembly on Sunday.
The meeting, chaired by Saad bin Sherida al-Kaabi, the Minister of State for Energy Affairs and CEO of QatarEnergy at a time when the company is navigating the demands of a dynamic energy market.
The 25% dividend represents QEWC’s ongoing commitment to delivering value to its shareholders, underpinned by its consistent profitability and strong financial health.
Al-Kaabi, a key figure in Qatar’s energy strategy, emphasised that the decision aligns with the company’s long-standing goal of balancing shareholder returns with sustained growth.
The eligibility date for the dividend has been set as the close of trading on September 8, 2024, the day of the general assembly meeting.
Corporate amendments and strategic flexibility
In addition to approving the dividend, shareholders gave the green light to amend QEWC’s Articles of Association.
The amendment grants the board of directors the flexibility to distribute interim dividends when justified by the company’s financial performance.
Such flexibility aligns with the regulatory framework set out by the Qatar Financial Markets Authority (QFMA) and the Commercial Companies Law, ensuring that the company can respond dynamically to market conditions while maintaining its obligations to shareholders.
QEWC expects to maintain investor confidence as the company continues to expand its operations, particularly in water desalination and power generation.
The board’s newly authorised discretion allows for dividends to be distributed more frequently, provided the company’s financial performance supports it.
According to QFMA Decision No. 7 of 2023, concerning dividend distribution rules for companies listed on the Qatari financial markets, QEWC will transfer the interim dividend amounts to Edaa, the central securities depository. Edaa will manage the distribution among eligible shareholders, ensuring a streamlined and efficient process.
Established in 1990, QEWC is one of the region’s leading utility companies. It operates a range of power plants and desalination facilities, meeting the growing demands of Qatar’s industrial and residential sectors.
The company’s strategic importance to Qatar’s national development plans is underlined by its close ties with QatarEnergy and the government.
QEWC’s operational footprint extends beyond Qatar’s borders, with investments in several regional and international energy projects. Its diversified portfolio, particularly in water desalination, positions it as a key player in addressing the region’s critical resource challenges.
With the Middle East facing growing water scarcity and increased energy demand, QEWC’s role is becoming ever more crucial.
The company has also been at the forefront of Qatar’s push towards sustainability and energy efficiency. In line with the Qatar National Vision 2030, QEWC has made significant strides in reducing its environmental impact through more efficient energy production methods and the integration of renewable energy sources.
Financial performance and outlook
QEWC’s financial health remains robust, supported by stable cash flows from its long-term power and water purchase agreements. These contracts, often backed by government entities, provide the company with predictable revenue streams, even in times of market volatility.
In the first half of 2024, QEWC reported a strong profit performance, bolstered by its expanding international portfolio and strategic investments.
The company’s profitability allows it to continue rewarding shareholders through dividends while reinvesting in new projects. The decision to approve a 25% interim dividend reflects the company’s strong earnings and commitment to maintaining a balanced approach to growth and shareholder value. For investors, QEWC’s dividend policy remains a cornerstone of its appeal, offering reliable returns in a region where dividend payouts are highly valued.
Energy transition
While the current portfolio of QEWC is heavily reliant on natural gas, which Qatar possesses in abundance, the company is exploring ways to diversify its energy mix, including investments in solar energy projects.
At the same time, the water desalination market, which QEWC dominates locally, is increasingly competitive. New technologies and players are entering the market, challenging the company to innovate and maintain its leadership position.
However, with Qatar’s continued economic growth and the government’s focus on infrastructure development, QEWC expects to capitalise on new opportunities, particularly in the renewable energy sector.
