STC doubles profit to SAR2.4bn by end-March 2014

22 Apr 2014

Saudi Telecom Company (STC), the country’s leading telco in terms of subscribers, has published its financial results for the three months ended 31 March 2014 on the Saudi Stock Exchange’s (Tadawul’s) website, reporting a 54.26% surge in profit to SAR2.391 billion (USD637.55 million) up from the SAR1.550 billion reported in 2012. The company attributed the improvements to a number of factors, including: a non-recurring and non-cash charge of SAR500 million for the impairment of intangible assets pertaining to Aircel (India) in 1Q13; a decrease in losses from investments by SAR409 million in the twelve months to 31 March 2014; and the increase in ‘other income’ by SAR283 million, relating to the disposal of fixed assets. However, STC’s revenue for the period amounted to SAR10.783 billion, a 6% decrease on the SAR11.474 billion reported in the three months to end-March 2013. Despite that, the company’s EBITDA improved, growing 12% year-on-year, to SAR4.290 billion.

In operational terms, STC continued the expansion of its 3G/3.5G network footprint to cover over 96% of the country’s populated areas, while also expanding the coverage of its 4G Long Term Evolution (LTE) network. In the period under review, STC’s fibre-optic network reached more than 900,000 households, with users of fibre-to-the-home (FTTH) services growing by 54% y-o-y.

STC chairman and managing director Abdulaziz Al-Sugair commented: ‘We continue to maintain an acute focus on reinforcing our presence in our home market. At the same time, we continue to rationalise STC’s international portfolio, and evaluate options for some of these investments in order to take appropriate actions in the best interest of the shareholders. Despite the decrease in consolidated revenue for Q1 2014 by 6% compared to the same period last year, the cost of services and operating expenses during the first quarter decreased 8% and 17% [respectively] compared to the same period last year, as a result to the company’s continuous efforts to control cost and improve the overall efficiency of [our] operations. In the meantime, STC continued to grow its international operations, revenues from the controlled international subsidiaries (excluding Axis Q1 2013 revenues for comparison purposes) grew 24% compared to the corresponding period last year.’

Saudi Arabia, Saudi Telecom Company (stc)