STC reports 54% net income growth for 1st quarter, and distributes SR0.75 per share for Q1, 2014
Saudi Telecom Company (STC) announced the company’s preliminary financial results for the period ending at 31 March 2014 (3 months).
After adjusting all comparable numbers, net profit for the 1st quarter reached SR2,391m, an increase of 54% compared to the corresponding period last year, and a decrease of 34% compared to the immediately prior quarter.
These financial results for the period has lead the Board of Directors to approve the distribution of a total of SR1,500m in cash dividend for Q1 2014, representing SR0.75 per share.
Commenting on the results, STC Group chairman and managing director, Mr. Abdulaziz Alsugair, stated: “The financial results achieved during the 1st quarter of the current year reflects the efforts being made to constantly evolve, improve and develop the company’s strategy and operations both domestically and internationally. We continue to maintain an acute focus on reinforcing our presence in our home market. At the same time, we continue to rationalize STC international portfolio, and evaluate options for some of these investments in order to take appropriate actions in the best interest of the shareholders.”
Mr. Alsugair also stated, “despite the decrease in consolidated revenue for Q1 by 6% compared to the same period last year, cost of services and operating expenses during the 1st quarter decreased 8% and 17% consecutively 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 the 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 corresponding period last year.”
Mr. Alsugair concluded, “We will continue with our ongoing efforts to remain customer-centric, which is clearly delivering results. This is a position we intend to maintain, by striving to lead through investing in technology and innovative solutions across fixed, mobile and data products.”
Internationally, VIVA Bahrain & VIVA Kuwait continue to grow their customer base and the increase in their market shares. As a result, the revenue grew for both companies during the 1st quarter compared to the same period last year. Also, during the 1st quarter STC has fully exited from the Indonesian market (as announced earlier) with the completion of the sale transaction of its subsidiary in Indonesia PT AXIS Telekom (AXIS) and that the proceeds were used to settle AXIS’s debts with its lenders and vendors.
Domestically, STC continues with the introduction of innovative and value added services that encourage mobile usage. This is underpinned by the Company’s customer-centric approach and its efforts to enhance the overall customers experience. The company, continued increasing the coverage of 3G & 3.5G networks to reach various parts of the country covering more than 96% of populated areas and deployment of the 4G network. During the 1st quarter, STC launched new postpaid plans with the tagline “The way you want it”. The plans will meet and address customers evolving needs, they are called Postpaid 30, 100, 200 and 400 for current and new customers. Current customers are able to upgrade to the new postpaid plans whenever they want. New customers can choose the monthly plan that suits their usage habits and benefit from discounts of up to SR2,700 when purchasing any smartphone with a 12 or 18-month contract. These new plans will ensure that STC remains ahead of competition domestically.
STC’s fiber optic network (homes & Businesses) reached more than 900,000 home pass (site), as a result, fiber optic services customers grew 54% during the 1st quarter compared to same period last year, and 5% compared to the previous quarter. The ongoing network expansion has also led to a further increase of 16% in the number of “InVISION” subscribers (STC’s Interactive TV service) during the 1st quarter compared to same period last year. In addition, the 1st quarter witnessed the launch of Jood 2 service with speeds starting from 10 – 200 Megabits to meet customers’ needs.
Enterprise business unit overall revenues increased 15% during the 1st quarter compared the previous quarter and an increase of 5% compared to same period last year, driven by the 13% increase in Business sector data services revenues, and 4% increase in the fixed line revenues during the 1st quarter compared to same period last year.