Thank you, Sammy. Good afternoon and good morning, everyone.

I'd like to welcome you to Saudi Energy first half of 2026 earnings conference call. My name is Rahaf AlFarhoud from Saudi Energy investor relation team.

I have with me on the call today Engineer Khalid AlGhamdi, our President and CEO; Mr. Abdulaziz Al-Muhaiza, Executive Vice President and Group CFO; and Mr.

Oqab Al-Nefaie, our Executive Director of Control and Reporting. Before we start the call, I need to direct your attention to our disclaimer in slide number 2 of the presentation.

As usual, a Q&A session with the management will follow the presentation, please join the conference call to ask questions. I will now give the floor to our CEO, Engineer Khalid AlGhamdi, who will provide key highlights on the period before handing over our CFO to take you through the operational and financial performance.

Engineer Khalid, over to you.

Thank you. Ladies and gentlemen, good day, and thank you for joining us for Saudi Energy financial results for the first half of 2026.

During the period, we continue to deliver against our strategic mandate as the backbone of the Kingdom's electricity needs, and as a key enabler for Saudi Vision 2030. The economic transformation across Saudi Arabia is increasing the scale, complexity, and strategic importance of the national power system.

Industrial development, population growth, digital infrastructure expansion, new economic clusters, and energy transition are all placing greater demands on the grid. Saudi Energy is responding by expanding and modernizing the power system at an unprecedented scale, while maintaining the reliability, resilience, and financial discipline expected of a leading national utility.

Our first half performance can be viewed through four important themes. First, strategic progress: we continue to strengthen the national electricity system, expand critical infrastructure, and support the Kingdom's broader economic transformation.

Second, sustainable and high-quality growth: our regulated business model and the regulated asset base required revenue framework provide enhanced earnings visibility and enable us to pursue disciplined investments to drive growth. Third, execution excellence at scale: we continue to advance major generation, grid, renewable integration, and battery storage projects while improving operating reliability.

As a proof point, this has led us to have a record Hajj without issues. Finally, financial discipline: our strong investment-grade credit profile, diversified funding access, and sustainable capital structure provide the capacity required to support our long-term investment program.

Together, these attributes reinforce Saudi Energy position as a high-quality and dependable regulated national utility champion that is a central participant in the Kingdom's energy transition. Let us take a look at how our accelerating growth in our customer base, regulatory asset base, and investment underpin our strong earnings.

We continue to see sustained growth across the Kingdom. Our customer base continues to grow.

Today, we have more than 11.6 million customer, which is an increase of about 215,000 customers compared to the first half last year in 2025. This growth is supported by the Kingdom's population growth, urban expansion, and continued development of new communities.

Alongside this continued customer growth, our transmission and distribution regulated asset base reached approximately 278-- 271.8 billion Saudi riyal, the highest on record, and representing strong year-on-year growth of 14.1%. This continued double-digit regulated asset expansion reflects the scale and pace of our infrastructure capital investment program over the past years, and provides a clear foundation for future earnings growth.

We also maintained high investment levels, and adjusted capital expenditures for excluding customer-funded assets and accruals reached to 38.7 billion Saudi riyal in the first half, increasing by 6% year-on-year. These investments continue to support our future growth trajectory.

These investments and asset growth are translating into strong financial performance during the first half of 2026. Operating revenue increased by 10.5% to 52.2 billion Saudi riyal.

EBITDA increased by 8.2% to 21.5 billion Saudi riyal. Net profit increased by 7.5% to 6.7 billion Saudi riyal, and EPS grow even faster by 17.8% to 0.53 Saudi riyal per share.

Finally, we distributed a cash dividend of 0.70 Saudi riyal per share for the full year of 2025, reflecting our continued commitment to shareholder returns while continuing to invest for long-term growth. Turning to operational excellence, our performance during the first half of this year demonstrate that we are expanding the energy system while continuing to improve security of supply, service reliability, and customer service, and advancing sustainability practices and performance.

Generation plant availability improved by 1 percentage point to 87.1%, supported by effective maintenance planning, asset life extension programs, and enhanced operational fitness. Importantly, during the summer period, plant availability further improved to 96.8%, demonstrating the resilience and readiness of our generation fleet during the Kingdom's peak demand season.

On the distribution network, SAIDI improved by 28% year-on-year, reducing the average duration of service interruption for our customers. Distribution automation is a key initiative for Saudi Energy.

We increased the automation of distribution network to 42% from 38.4% last year. This has resulted in improved fault detection and enables stronger remote control and restoration capabilities.

As a result, we have already exceeded our 40% automation target. We consider the current level of approximately 42% to be optimal for the network, and we expect to maintain automation around this level as the grid continues to expand.

These improvements are translating into better customer outcomes, and customer satisfaction increased to 88% compared with 86% last year. We also continued to strengthen our overall sustainability practices, disclosures, and performance.

This has been well demonstrated by improved independent evaluation for our ESG performance, with our S&P ESG score improving to 65, representing 30% increase year-on-year. Overall, these indicators are strong demonstration that our strategic focus is producing measurable improvements in system reliability and service quality.

We have invested confidently in our business and its assets, and today we are seeing the results. Before I pass it over to our CFO, I want to acknowledge an achievement that all of us at Saudi Energy are incredibly proud of.

Supporting the Hajj season is not simply an operational responsibility for Saudi Energy; it is a national duty, and one that we do not take lightly. Millions of pilgrims depend on reliable electricity system throughout their journey, particularly across the holy sites, where demand can reach exceptional levels [in a?]

concentrated period. During Hajj this year, peak electricity load reached a record of 464 megawatts in Arafah and 375 megawatts in Mina.

Despite this record load, Saudi Energy delivered the season with zero outages and zero incidents. This outcome was not achieved by a chance; it reflects years of planning and sustained investment in the energy infrastructure across the holy sites.

We have continued to strengthen this infrastructure through ongoing investments and operational readiness across the business. Today, the holy sites are supported by more than 6,000 circuit kilometers of distribution lines, over 3,000 substations, and more than 10,500 smart meters, all supported by 100% network automation.

Over the past year, we have made significant enhancements to the assets powering the holy sites. We added Mina 7 station, that is added another 134 MVA capacity, and in total we added 123 distribution substations.

We also enhanced the transmission and distribution network with 191 circuit kilometer of cables. Further, we advanced the fiber-optic network, and as a result we have fully automated distribution network at the holy sites.

In total, we carefully maintained over 25,000 units equipment at the holy sites to enable the success of Hajj. Behind these assets were our teams, working around the clock, supported by advanced monitoring systems to ensure uninterrupted service for each and every pilgrim.

This included extensive maintenance activities across our generation, transmission, and distribution assets. Thank you so much, and now I will turn it over to our CFO, Mr.

Abdulaziz Al-Muhaiza.

Thank you, Engineer Khalid, and thank you all for participating with us today, and shedding some light on the company's financial and operations performance for the period. Saudi Energy continues its growth across the integrated value chain of generation, transmission, and distribution.

In generation, we operate and own 38 power plants generating 56.9 gigawatt of capacity. The availability has improved compared to the same period of last year reaching 87.1%, and also summer availability also has increased by 1.4% reaching 96.8% compared to last year.

The total generated energy from these plants has reached to 109.2 terawatt hour for the period. When we shed some light on the transmission businesses, the transmission assets and transmission network line has increased by 4.2% reaching 108.1 thousand circuit kilometer with a transmission transformer capacity of 560,000 MVA, with an increase of 9.2%.

When it comes to the renewable grid integrated, it has increased by 86.4%, a substantial increase from 9.5 to 17.8 gigawatt of capacity, and the energized battery storage also has reached to 18 gigawatt hour, which 125% compared to the same period of last year. When we move and look into the distribution and retail businesses, the distribution network line reached to a 868.9 thousand circuit kilometer, that's a 5% increase to the network.

The customers we are serving today, 11.6 million customers, with almost 2% increase in the numbers of customers, and new customers are joining us. This has resulted in an energy sold of 160.7 terawatt of sold energy compare with almost a stagnant growth compared to the same period of last year.

Moving on to the next slide, slide number 11, where we will be dig deep down on each of these businesses starting with generation, and the potential growth and the strategy of the company in each of these businesses. The company is capturing the growth of generation with 23.4 gigawatt of capacity, 11 gas thermal generation projects under development.

The company in the past 12 months signed two PPAs: one is Rabigh 1 expansion with 25 years with SPPC, the Saudi Power Procurement Company; and the other project is Rabigh 2 expansion, which is Al-Murjan IPP, with 31 years PPA, purchase power agreement, take-or-pay. On the other hands, the company also continue its commitment to the energy transition and the liquid-to-gas commitment by 2030 with a eight projects under energy transition to gas from liquid, 22.3 gigawatt of capacity.

The company has completed phase one of PP10 of 1.7 gigawatts, and the Rabigh 2 is also almost commissioned. Under renewable trends, the company has partnered with EDF in Samha's project with 600 with 600 megawatts under development, and also the company is participating in round seven tender that is being tendered by the SPPC of 5.3 gigawatts.

When it comes to security of supply and reliability, 2.4 gigawatt of assets extension have been extended, and 10 units have been restored with 256 megawatt of capacity. Moving on to the next slides and looking into the transmission and distribution and the backbone of the power system here in the Kingdom, transmission network has increased by 3.5 thousand circuit kilometer added during this period.

We have energized 49 substations. The battery storage for the first 6 months has been increased to 10 gigawatt hour, with 4 gigawatt hour being under construction.

1.5 gigawatt of interconnection with Egypt has already been energized. The same story of growth goes to the distribution business, with an increase of distribution network of 9.8 thousand circuit kilometer, with 3.3 thousand transformer energized during the period.

We have added 151,000 customers, reaching again as I said to 11.6 customers in total, with 42% automation. Now, all of these growth are coming as part of the company's growth and target for 2030, which can be seen at the bottom of the slides, where we are targeting to reach 146,000 transmission line circuit kilometer by 2030, and 1.5 thousand transmission substation.

Distribution line, it is expected to reach by 2030 1.1 thousand circuit kilometer, with a distribution transformers as well reaching to 172,000 distribution transformers by 2030. Moving on to the next slide, where we are setting some lights on the renewables and the energy transition when it comes to the company's commitment to support the renewable energy and the penetration of the renewable energy in the system as well as the battery storage.

The national target for the renewable energy is 81.7 gigawatt, 60 86% of this already being tendered or energized. 17.8 gigawatt has been added since the beginning of the year.

46.7 gigawatt is being under construction, and 13.1 gigawatt is in the pipeline. The same story goes to the battery storage.

The target nationally is 42. 18 gigawatt fully owned and operated by the company is energized, 4 is being under construction, and 22 is 22 gigawatt hour is the targeted capacity by end of 2026.

When it comes to the other businesses as part of the group, which we call them beyond the value chain of power, these subsidiaries continue to grow in the respected businesses, starting with the telecom business: 4 million IoT SIM card activated by the telecom company. Today, they have reached to 34 city, energizing more than 927 FTTX and homes across the Kingdom.

The same growth goes to the second subsidiary, which is the project development company. Today, they are managing 1.3 thousand projects, including 119 gigaprojects and national gigaprojects, reaching the total projects under management today to 54 billion Saudi riyal.

The ICC, which is the company that is basically responsible for constructing and developing the new generation capacity, today they are managing the construction of 23.4 gigawatt, and as I mentioned, they've already signed multiple PPAs with the Saudi Power Procurement Company. Energy solutions, the same growth, where they're supporting the ecosystem of the energy in general, with winning 54 projects in Q1, and also supporting the customers with a combined capacity of 1.5 gigawatt.

The real estate, Ittijahat Al-Osool, the real estate company has already been activated and started to do its operations when it comes to executing the company's strategy of the real estate by monetizing the real estate assets that we have commercially, and utilizing them to deploy all of these proceeds in the core business of the company starting early this year. Moving on to slide number 15, where we will be shedding some lights on the figures and numbers of the company for the first half, the revenue has increased by 10.5% reaching to 52.2 billion Saudi riyal, and the Q2 has increased by 11.3% year-on-year.

The same goes to the gross profit, it has increased by 8.5% compared to the same period of last year. The operating profit for the period 7.6% increase year-on-year as well.

The bottom line has increased by 7.5% year-on-year, and the Q1 was negative by 7.4%, primarily due to the increase of debt that the company raised during this period to finance its growth and capital projects. The earning per shares has increased by 17.8% year-on-year compared to the same period of last year.

The primary KPI, which is the EBITDA, which shows the growth in the business and the profitability of the business generated by the company, has increased by 8.2% for the period, and 3% for Q2, respectively. When it comes to the details of these elements, a substantial increase in the revenues, 10.5%, adding 5 billion to the top line of the company, primarily driven by the increase in electricity sales by 1 billion, and also increase of transmission use of system by 26.2% reaching to 100 209 million Saudi riyal, and also the balancing account and the other operating revenue by 3.5 billion.

This has resulted us reporting 52.2 billion Saudi riyal in the top line. When we look at the segments and drivers of the revenue is driven almost across the segments, except for industrial, with different percentage of growth compared to the same period of last year, and this has also contributed from quantity base to the revenue and electricity sales at the bottom of the slides.

When we look at the primary drivers for the increase of our bottom line from 6.2 billion to 6.7 billion, the top line, as I mentioned in the previous slide, there has been an increase on the operating revenue by 1.6 billion, the balancing account increased by 3.3 billion Saudi riyal. There has been some increases in cost of fuel and purchased power and other operating costs and depreciation in line with the growth of the business and an increase in sales, as well as the finance cost of 211, which again is resulted of that increase of almost 500 million Saudi riyal on the net income.

The company, as you'd expected from the story, continue to invest heavily in its capex and execute its strategy. The capex invested in the period has reached to 38.7 billion Saudi riyal, primarily on the transmission business, which include also battery storage, coming in second the distribution and then generation, and this is goes in line with the company's strategy that has been already communicated, which shows also that we are executing based on that plan.

Again, this is slightly higher than what we have invested with the same period of last year, but however, we are expecting that the total invested capex by end of the year reach to 70 billion to 75 billion Saudi riyal. When it comes to the primary drivers of the growth of the business of the company, which is primarily the transmission and distribution and the growth in the RAB, you will see that the company has managed to capitalize 28.8 billion worth of work-in-progress projects and energize them.

This has increased the RAB compared to the same period of last year 12 months by 14.1%, from 238 billion Saudi riyal worth of RAB compared to 272 billion Saudi riyal. This is a substantial growth, representing the efficiency and the company's turning projects into energized assets that generate returns and revenue to the company.

We are expecting this also to continue year-on-year, as we have shown from 2022 up until 2025, again with the same rhythm, with the same percentage reaching to almost double-digit growth in the RAB year-on-year. When it comes to the way the company fund its investments and growth, the company has a clear strategy of diversifying the source of funding coming from a different pools of liquidity that is locally and regionally and internationally, with a different type of instrument that we tap into to fund those investments.

Also we are looking at our balance maturity profile carefully, and pre-fund them and refinance them as required as we go, monitoring the market, monitoring the opportunities ahead of us in capturing the opportunity that can be used to refinance or to fund the growth that is required from a project perspective. The company in that regard have tap into the market multiple times since the beginning of the year, with a public issuance, with a 16 billion Murabaha facility that we signed with the local banks, and refinancing also for 16 billion early in the year, with multiple also bilateral agreements that we sign with international banks, export credit agencies, and also local banks.

When we move to the balance sheet, the company look at its balance sheet positively, maintaining a balanced debt and equity compared to other peers in the business. We maintain a very healthy balance with especially the robust regulatory regime that we're operating in, and maintaining a healthy ratios on that regard.

Finally, a couple of messages that I just want to leave you with: the results that we reported in Q2 and for the period is a continuation of the company's successful strategic delivery of projects and capex investments and growth. The growth has also coupled with a growth in our performance and returns to our investors and operations and reporting growth in our EBITDA.

We are focusing on advancing our operational excellence and capturing efficiencies across the value chain, and be as efficient as possible by improving our KPIs, our availability in generation, supporting the resilience of the system and the security of supply to our customers. We continue with our strategic growth when it comes to the strategic investments that we've done for the period, and continue our commitment of targeting double-digit growth in our RAB year-on-year, which is again resulting in a positive results and growth in our results.

All of this is coming with the company's maintaining its diversified pool of funding and maintaining its creditworthiness and credit rating robust levels. Also at the end, we are positioning ourselves to support the Kingdom's economy and the Kingdom's power sector to achieve the Vision 2030 target, inshallah.

Thank you.

Thank you, ma'am. Thank you, management.

Am I audible?

Please go ahead.

Thank you for the presentation. This question is coming on behalf of Eldar Kaziev, HSBC.

When do you expect the new regulatory WACC rate for the 27-29 period to be finalized and released?

Sure. As you may know, as we've communicated, the regulatory regime get reset every 3 years.

The first regulatory period started in 2021 and ended 2023. The second regulatory period started in 2024 and end this year.

We are expecting that the WACC will be released before the end of the year, but again, this is a regulatory decision, and the regulator, the way they see it, whenever there is suitable for them to announce it, they will announce it. However, generally we're expecting this to come before the year-end.

Thank you. I'll go back in queue.

Thank you. Could you please share RAB asset bases for distribution and transmission segments separately?

Any chance you could share also the depreciation charges in the transmission and distribution segments over the first half of '26?

Thank you for the question. I think we are giving in the financials a segregation of the business on a standalone basis for generation, transmission, and distribution.

If you look at the notes, you will see that segregation there, with the cost of generation, transmission, and distribution from a depreciation perspective which you've asked for.

If I am to understand correctly, the regulator does not use a different cost methodology while calculating the required revenue, is it? Or it's the same as what you have reported?

Can you please repeat your question again?

It is our understanding that under RAB model, the regulator operates with a different P&L when setting the required revenue, where costs are different from those reported in IFRS. Any disclosure helping us understand the key differences will be appreciated.

I think, again, the regulatory accounting doesn't differentiate the cost. There is definitely the difference, from a reporting perspective, between the IFRS standards and the regulatory accounting aspects.

However, what's being reported is almost fairly in line with what's being reported to the regulator. There might be some detail segregation between transmission and distribution that gets reported to the regulator, but going back to the same question you've asked earlier on the depreciation, there is no change.

There is a technical lifetime that is in line with the IFRS standards that we have accounted for. There is no big, significant change there.

All right. Thank you so much.

Just the last one if I may. Any thoughts on 2027 capex?

Any guidance you can provide?

Sorry, 2027 what?

The capex. Any guidance you can provide?

Sure. I I think generally the company's strategy from that we've have always been communicating that the company is executing a very important investment plan to the Kingdom and to the sector.

We're expecting we have seen a significant increase under the capex of last year and also in 2024. We're expecting this year and last year is going to be with the same level, and start declining towards 2028, '29, and 2030, as we are up-floating our investments ahead of the major events and gigaprojects that are going to be energized by then.

Hello, thank you for the presentation. I just had a quick question.

Given the continued capex needs over the next few years and given that the financing costs have also been increasing, are you guys looking at any other sources of financing to finance the continued capex needs over the next few years?

Sure. A couple of things just to clarify on this point.

Definitely this is a very important question. I think the funding plan for the company has been a very important and key to the success of our investments plan.

When we look at the company's businesses, the transmission and distribution is a core business which will be financed through multiple funding pools, which I'll come to it in details. However, in generation, we'll continue to be on a project financed basis as it is backed by a PPA and a purchase power agreement signed with the SPPC, which is owned by the government, and I think this will continue with that model.

Now, when it comes to transmission and distribution, every year, every period, we assess the market, we assess the options. Definitely we are looking into not only just a debt option.

We started monetizing some of our assets, and if you look into the presentation that we've presented, we started with our real estates as a one asset monetization exercise that we do for what we call it in the company non-revenue generating assets, which is the real estate, and we will continue with this as a source of funding to the core business. However, to answer your question, given the stable balance sheet that we have and room of accessing cheap capital through the debt capital market, the debt generally is going to be the primary funding for the growth.

The concerns that you've mentioned on the increase of cost of debt, this is going to be compensated for the company through the regulated weighted average cost of capital, which is getting resets every 3 years, we're not concerned about being compensated for that increase and the volatility in the market as the regulator is looking into this as well. However, just in a very simple term, we are trying and working to diversify the funding for our core business in the future, bearing in mind the market condition, the diversification of pool of funding for the growth.

All right. Thank you very much.

Just if I can, can you give some more details about how you are planning to monetize the real estate assets that you have? Is there anything in place which you may want to share, or is it still in very early stages?

We have already started, and I think if you are interested more on this topic, I think it would be more insightful to reach to the subsidiary itself and see the monetization strategy that they have in details, some of their monetization structure mature or some of them is at early stage, which I think the investor relations team can connect you with them directly.

Sure. Thank you very much.

Thank you.

Thank you for the opportunity to ask a question. My question is on the suppliers.

Do you think or did you face any indication from them of delays or suffering from cost escalations due to the conflict? Thank you.

Definitely we are looking into the geopolitical situation very carefully and we are monitoring the sustainability of supply chain and security of supplying the needs of our projects. However, given the government's direction and the close coordination between the company and Ministry of Energy, we haven't seen a significant delay or change that might impact the execution of project.

There might be some delays in some of the projects due to some delays in arrival of some of these spare parts or material for the projects, but this is not going to be a significant that is going to impact the execution of projects. I think the results of the period is a great proof of the resilience of the supply chain and the execution of these projects, not to mention that a big portion of our supply is localized and coming from the local market.

Great. Thank you very much.

We would like to thank you for your continued engagement and for joining us for today. Today's presentation and all supporting material will be available on our website as well as our investor relation application, for which you can see the QR codes on the screen.

Once again, thank you very much, and we look forward to engaging you again in our next call. Thank you.