In a significant move, Dubai Electricity and Water Authority (DEWA) has announced the approval of a dividend payment of Dh3.1 billion to its shareholders for the second half of 2024. This decision was made during the company’s annual general assembly, where shareholders gave their consent for the distribution. The payment is part of DEWA’s commitment to providing strong returns to its investors while continuing to invest in sustainable energy solutions.
Background on DEWA
DEWA is the exclusive provider of electricity and water services in Dubai, playing a crucial role in meeting the emirate’s growing energy demands. The company has been at the forefront of innovation, focusing on clean energy and sustainability. In recent years, DEWA has made significant strides in increasing its renewable energy capacity, with approximately 17.8% of its installed generation capacity now coming from clean sources.
Financial Performance
In 2024, DEWA achieved a record revenue of AED 30.98 billion, marking a 6.18% increase from the previous year. This growth was primarily driven by the rising demand for electricity, water, and cooling services in Dubai. The company’s EBITDA also reached an unprecedented AED 15.70 billion, reflecting its strong operational efficiency and strategic investments.
Dividend Policy
DEWA has a clear dividend policy aimed at providing consistent returns to its shareholders. The company intends to pay a minimum annual dividend of AED 6.2 billion over the next five years, starting from October 2022. Dividends are distributed semi-annually in April and October. This policy ensures that shareholders benefit from DEWA’s robust financial performance while allowing the company to retain sufficient capital for ongoing investments and growth initiatives.
Recent Dividend Payments
In October 2024, DEWA distributed AED 3.1 billion in dividends for the first half of the year to its shareholders. The upcoming dividend payment of AED 3.1 billion for the second half of 2024 is expected to be distributed in April 2025, pending final approval at the annual general assembly.
Shareholder Approval
The approval of the dividend payment for H2-2024 was made during DEWA’s annual general assembly, which was attended by a significant majority of shareholders—85.9%. The meeting was chaired by Matar Humaid Al Tayer, Chairman of the Board of Directors of DEWA, and included Saeed Mohammed Al Tayer, MD and CEO of DEWA, along with other board members.
Impact on Shareholders
For shareholders who invested in DEWA’s shares before the dividend record date, the next twelve-month dividend yield is expected to be around 5% based on the IPO share price of AED 2.48 per share. This attractive yield reflects DEWA’s commitment to providing strong returns to its investors while maintaining a stable financial position.
DEWA’s Strategic Initiatives
DEWA is actively involved in several strategic initiatives aimed at enhancing its operational efficiency and contributing to Dubai’s sustainability goals. These include:
- Mohammed bin Rashid Al Maktoum Solar Park: DEWA is advancing the fourth phase of this solar park, which is part of a broader plan to increase renewable energy capacity.
- Smart Grid Investments: The company is investing AED 7 billion in smart grid technologies to improve efficiency and reliability by 2035.
- Clean Energy Targets: DEWA aims to increase its clean energy production to support Dubai’s goal of becoming carbon neutral by 2050.
These initiatives support DEWA’s financial growth and contribute to Dubai’s vision for a sustainable future.
Investor Confidence
The consistent dividend payments and strong financial performance of DEWA have bolstered investor confidence in the company. DEWA’s shares are listed on the Dubai Financial Market (DFM), and the company’s commitment to transparency and shareholder returns has made it an attractive investment opportunity for both local and international investors.
Future Outlook
DEWA’s focus on sustainability and clean energy is expected to drive its future growth. The company is committed to achieving Dubai’s 2050 Net Zero target, which involves significant investments in renewable energy projects and smart grid technologies. With its robust financial performance and strategic investments, DEWA is well-positioned to meet the increasing energy demands of Dubai while contributing to a sustainable future.
The approval of the Dh3.1 billion dividend payment for H2-2024 underscores DEWA’s commitment to its shareholders and its vision for sustainable growth. As the company continues to expand its clean energy capacity and improve operational efficiency, it is likely to remain a strong performer in the energy sector, providing both financial returns and environmental benefits.
