← Market Overview

2082

Governance: A

ACWA POWER

ACWA POWER Co.

181.90 SAR / Share

As of: Jan 25, 2026

71.2x P/E Ratio Trailing 12 Months

4.7x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

139.42B SAR Market Cap Total Valuation

0.45 Beta Systematic Risk Index

26.2% Net Margin Net Profit / Revenue

The Story

ACWA Power operates as a highly leveraged, capital-intensive developer of utility infrastructure, driving robust revenue growth through massive reinvestment despite returns on capital that closely track its cost of capital.

Source: Q1 2026 (2026-05-10)

Value Creation -0.2% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

—

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

+6.6%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

26.2%

ROIC Return on Invested Capital

5.6%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

71.2x

P/B Ratio Market capitalization compared to corporate book value

4.7x

EV / EBITDA Operating multiple reflecting core operational leverage

45.5x

EV / SALES Asset pricing multiple relative to total topline revenue

22.0x

Growth Story

ACWA Power's growth is characterized by aggressive capital deployment and expansion. Revenue has risen steadily from 6.10 billion SAR in FY 2023 to 7.41 billion SAR in FY 2025, reaching a TTM figure of 7.47 billion SAR. This expansion is fueled by an extraordinary five-year average reinvestment rate of 117.49%, reflecting the company's strategy of pouring more cash back into project development than it generates in operating profits. This massive capital deployment yields a sustainable growth rate of 6.64%. Much of this growth is executed through equity-accounted investees (joint ventures), which stood at 23.58 billion SAR in early 2026, bolstered by strategic moves such as acquiring an additional 32% stake in the Shuaibah Water and Electricity Company for 777 million SAR. Capital expenditures remain high, with TTM Capex at 4.44 billion SAR, primarily directed toward capital work-in-progress for utility plants under construction.

Profitability Dynamics

Profitability at ACWA Power is defined by high operating margins but modest returns on capital due to the immense asset base. The company boasts a strong TTM operating margin of 39.85% and a net profit margin of 26.22%, translating to TTM EBIT of 2.98 billion SAR and Net Income of 1.96 billion SAR. However, the five-year average ROIC of 5.65% falls slightly short of its WACC of 5.88%, resulting in a marginal negative value-creation gap of -0.23%. This indicates that while the utility outsourcing model generates highly predictable and substantial operating cash flows—supported by capacity charges under operating and finance leases—the sheer scale of capital employed limits excess return generation. Profitability is also heavily supported by non-operating elements, such as management advisory fees from joint ventures (77.4 million SAR in Q1 2026) and finance income from shareholder loans.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.45

Cost of Equity Minimum required rate of return demanded by shareholders

6.2%

WACC Weighted average cost of total debt and equity funding

5.9%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

22.4%

Risk Factors

The primary risk for ACWA Power lies in its highly leveraged balance sheet, with total debt reaching 31.19 billion SAR against a cash balance of 6.60 billion SAR. However, this leverage is mitigated by its structure: 21.66 billion SAR of the debt is non-recourse, secured directly by individual project assets with no recourse to the parent company. To manage interest rate volatility, ACWA maintains a strict hedging policy, keeping over 70% of its debt position hedged. Beyond balance sheet debt, the company carries massive off-balance-sheet commitments, with outstanding contingent liabilities and guarantees totaling 28.37 billion SAR, reflecting its heavy equity commitments to joint ventures. Operational and regulatory risks are also prominent, including complex multinational tax exposures under the OECD Pillar Two framework—requiring top-up tax provisions in jurisdictions like Bahrain and Kuwait—and ongoing legal arbitrations, such as a 487.5 million SAR dispute with an EPC contractor.

Governance Disclosures

Rating: A

We track 13 key governance and oversight matters for this company in our database.

Significance: 4/10 Info Asymmetry

Management Incentive and Treasury Shares

The Company purchased 597,878 treasury shares for SR 132.6 million at market price to fund an Employee Stock Incentive Program. The Group also recognized SR 50.3 million in share-based payments for the long-term incentive plan (LTIP) for key management personnel.

Mitigating Factors: The program was approved by the Board of Directors in 2023 and subsequently by shareholders in 2025.

Significance: 4/10 Entrenchment

Management Long-Term Incentive Plans

The Group operates both cash-based and equity-settled long-term incentive plans (LTIP) for key management and select employees. In 2025, a provision of SAR 67.3 million was recognized for the cash-based plan, and SAR 77.12 million worth of shares were granted under the equity scheme.

Mitigating Factors: The equity-based plan was approved by shareholders at a general assembly, and share grants are subject to approval by the remuneration committee based on performance formulas.

For more, click here to view the full governance profile →

In-Depth Analysis