STC reports 96% Net Income growth for the 2nd quarter 2014, and distributes SR 0.75 per share for the 2nd quarter
Saudi NewsJul 21, 2014
Net Income for the 1st half 2014 increased 74%, and Operating Profit increased 17% during the 1st half of 2014, with major improvements in international operations and continued revenue growth in Business sector services
Riyadh, Kingdom of Saudi Arabia, 21 July, 2014 - Saudi Telecom Company (STC) today announced the company’s preliminary financial results for the period ending at 30 June 2014 (6 months)
Revenues from the controlled international subsidiaries (excluding Axis 1st half, 2013 revenues for comparison purposes) grew 22% compared to corresponding period last year.
Cost of services for the 1st half declined 4% compared to the same period last year.
Operating expenses for the 1st half declined 10% compared to the same period last year.
Operating profit for the 1st half reached SR 5,627m, an increase of 17% compared to the same period last year.
EBITDA for the 1st half amounted to SR 8,970m, an increase of 13% compared to the same period last year.
Enterprise business unit overall revenues increased 6% during the 2ndt quarter compared same period last year.
After adjusting all comparable numbers, net profit for the 2nd quarter reached SR 2,803m, an increase of 96% compared to the corresponding period last year, and an increase of 17% 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 SR 1,500 million in cash dividend for Q1 2014, representing SR 0.75 per share.
Commenting on the results, STC Group chairman and managing director, Mr. Abdulaziz Alsugair, stated: “The financial results achieved during the 1st half 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. STC is playing a major role in building the knowledge based economy and the transformational role for information and communication technology, and now STC is a main contributor in planning the future path for the development of digital smart in the country. This will improve & enhance STC position domestically, regionally and will positively impact the future performance of the company which will lead to generating higher returns to the shareholders.”
Mr. Alsugair also stated, “The growth in international subsidiaries operations during the 2nd quarter contributed to the 3% growth in consolidate revenue from services compared to same period last year. Meanwhile, consolidated revenue for the 1st half of 2014 declined by 2% compared to the same period last year (due to the decline in the 1st quarter revenue). Despite this decline, cost of services and operating expenses during the 1st half decreased 4% and 10% 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.”
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 for both business and personal sectors.”
Internationally, VIVA Bahrain & VIVA Kuwait during the 2nd quarter continue to grow their customer base and their market shares. As a result, the revenue grew for both companies during the 2nd quarter compared to the same period last year. Also, during the 1st half of 2014, STC continued to grow its international operations revenues from the controlled international subsidiaries (excluding Axis 1st half, 2013 revenues for comparison purposes) grew 22% compared to corresponding period last year.
Domestically, STC during the 2nd quarter continued with the introduction of innovative and value added services and customized offers with the appropriate smart phones that encourages mobile usage for both post-paid and pre-paid “SAWA”. These offers were customized to meet various customers’ needs, for calls, internet and social media usage. Also the 1st half of this year witnessed a huge increase in data traffic over the 4G network with an unprecedented growth, where the monthly data volume over the 4G network surpassed the total data traffic over the 3G and 2G networks together by 9%. During the 1st half data traffic over the 2G and 3G network grow 196% compared to same period last year. Therefore, STC will continue with deploying 4G as the coverage during Q2 reached around 85% of populated areas.
This growth was facilitated by the smart bundles that STC was keen to meet the needs of different customer segments being individuals, residential or business customers by expanding sale points and satisfying the desires of the user in addition to the after-sale services and expansion of virtual channels, social media channels and smart device applications.
In preparation for 2014 Ramadan, Hajj, Umrah and summer vacation seasons, STC has adapted its networks in Makkah and Medina by upgrading their capacities and raising the level of readiness. The company focused on keeping up with the expected increase of demand on mobile data services by reinforcing 4G and 3G networks. In order to meet this demand STC has added 202 new 4G sites in Makkah and Medina which represents an increase of 44% compared to last year. STC also added 226 new 3G sites with very high capacities with the intent of accommodating the expected increase in voice and data services. Also, 2G network has been reinforced with 248 additional base stations.
STC’s continues with the deployment of the fiber optic network. “FTTH” customers increased 44% during the 2nd quarter compared to the same period last year and increased 11% compared to the immediate previous quarter.
Enterprise business unit overall revenues increased 6% during the 2nd quarter compared the same period last year, driven by the 14% increase in Business sector data services revenues, and the increase in the fixed line revenues during the 2nd quarter compared to same period last year. In addition, STC launched new managed data service plans during the 2nd quarter in order to accommodate business sector needs.