Saudi manufacturers are beginning to calculate what higher electricity and water bills will mean for their margins next year.
Middle East Specialized Cables Company (MESC) warned in a Tadawul disclosure on Monday that revised utility tariffs could increase production costs. The company hasn't quantified the impact, saying it will disclose any material effect on its financial statements later.
And it isn't alone. Power and Water Utility Company for Jubail and Yanbu (MARAFIQ) has also confirmed changes to its electricity and water tariffs. The adjustments take effect on January 1, 2027, as part of a broader revision covering residential, commercial, industrial and government customers.
Why it matters: Electricity and water are major operating expenses for energy-intensive manufacturers, particularly in metals, chemicals and industrial production. Higher bills could squeeze margins just as companies are dealing with elevated freight, insurance and supply-chain costs.
The government has also announced support measures for eligible Saudi citizens, including an additional SR500 ($133) monthly allowance, alongside changes to the wage threshold used to calculate Saudization quotas.
The question for investors: Which companies can absorb the increases, and which will pass them on to customers?
Expect more disclosures from Saudi-listed manufacturers as they assess the impact ahead of January.
