STC Q4 net profit slumps 33% on higher expenses

20 Jan 2015

Saudi Telecom Company (STC) has posted a net profit of SAR2.442 billion (USD650.1 million) for the three months ended 31 December 2014, a decrease of 32.6% from SAR3.623 billion in the year-ago period, despite the firm booking a SAR595 million gain from the transfer of land and buildings in the Al Faisaliah area of Riyadh to the government. STC attributed the decline in net profit to a 19% increase in operating expenses during the fourth quarter, mainly due to: the booking of a SAR399 million one-time impairment on its investments in Oger Telecom; a SAR164 million (10%) increase in depreciation and amortisation; and a 19.5% rise in general and administrative expenses. STC also booked a separate SAR164 million loss because of an accounting method change for its investment in India’s Aircel Group. Net profit for the twelve-month period totalled SAR11.008 billion, up 11.2% from SAR9.897 billion in 2013.

Revenue from services rose 5.2% year-on-year in the fourth quarter of 2014 to reach SAR11.848 billion, and for the twelve-month period turnover amounted to SAR46.108 billion, an increase of 1.1% from SAR45.605 billion the previous year. Earnings before interest, tax, zakat, depreciation and amortisation (EBITDA) for 4Q14 decreased 6.7% year-on-year to SAR4.201 billion, but for full-year 2014 rose 7.0% to SAR18.581 billion.

Saudi Arabia, Saudi Telecom Company (stc)