Mixed Q1 results for Saudi telecom sector
Telecom companies in Saudi Arabia have posted mixed results for the first quarter of the year.
Saudi Telecom Co (STC) reported a 5.2 per cent drop in net profit at SAR2.38 billion, compared with SAR2.50bn in the prior-year period.
The kingdom’s former monopoly said the rising costs knocked down its earnings. The company, whose profit has been falling for five of the preceding six quarters, said its cost of services increased by 12.3 per cent.
General and administrative costs, along with depreciation and amortisation, increased by SAR332 million combined.
STC’s quarterly revenue was SAR12.76bn, versus SAR12.47bn in the corresponding period of 2015, an increase of 2.3 per cent.
On the other hand, Etihad Etisalat (Mobily), which had been entangled in erroneous accounting snarls last year, posted a net profit of SAR16.m for the Q1 2016. This compares with a loss of SAR44.5m in the same period a year earlier.
EFG Hermes had forecast a net loss of SAR4.59m.
Mobily’s revenues amounted to SAR3.44m, compared with SAR3.65m for the same quarter in 2015.
The affiliate of the UAE’s Etisalat said the six per cent drop in revenues was mainly due to the decrease in interconnection revenues, handsets sales and certain pressure on the sales with the advance of the implementation of the fingerprint process.
Meanwhile, the latest player in the market, Zain Saudi, saw another loss-making quarter. Ever since it was launched in 2008, the company, 37-per cent owned by Kuwait’s Zain, has not made a quarterly profit.
It reported a net loss of SAR250m during the first three months of the year, but was down from a net loss of SAR257m recorded in the corresponding period a year ago.
Zain Saudi’s revenue during the period under review rose to SAR1.77bn, up from the SAR1.68bn recorded in the same period in 2015.
(With inputs from Reuters)