Saudi Telecom Company (STC) today announced the company’s preliminary financial results for the period ending at 30 June 2013 (6 months)
Revenues for 1st half, 2013 reached SR 22,080m, an increase of 4% compared to the same period last year.
Gross profit for 1st half, 2013 increased 4% compared to the same period last year reaching SR 13,228m.
EBITDA for the 1st half of 2013 amounted to SR 7,937 million compared to SR 8,418 million for the corresponding period last year with a decrease of 6%.
More than 600,000 location connected with fiber optic network, and serving more than 200,000 customers with fiber optic services.
Wireless broadband revenue during the quarter grew 29% compared to the same period last year.
Mobile Broadband customers during the quarter increased 40% compared to the same period last year.
Fixed Broadband customers during the quarter increased 11% compared to the same period last year.
Net profit for the 1st half of 2013 amounted to SR 2,979m compared to SR 4,929m for the corresponding period last year, a decrease of 40%, and for the 2nd quarter net profit reached SR 1,429m compared to SR 2,408m for the corresponding period last year, a decrease of 41%, and a decrease of 8% compared with the immediately prior quarter. The decrease in net profit for the 1st half of 2013 compared to the same period last year (despite the 4% increase in gross profit during the 1st half of 2013), Is attributed to the booking of one-time, non-recurring and non-cash charge of SR 1,104m resulting from fair valuation of its investments in Asia (Aircel and Axis) and unrealized FX losses of SR 601m due to the sharp depreciation of Turkish Lira , Indian Rupee and Indonesian Rupiah (despite the 4% increase in gross profit for the period due to the increase in services revenue). Impacting the results was also the disposal of fixed assets with a net book value of SR 277m during the 1st quarter.
These financial results for the period has lead the Board of Directors to approve the distribution of a total of SR 1,000 million in cash dividend for Q2 2013, representing SR 0.5 per share.
Commenting on the results, STC Group chairman and managing director, Engineer Abdulaziz Al-Sugair, stated: “The financial results for the 1st half of 2013 were overall good, reflecting STC group capability of delivering high single digit top line growth. Revenues from domestic operations during the 1st half of 2013 increased 5% as a result to the growth in business sector and Broadband (fixed & wireless) services revenues. Also, the 1st half of 2013 experienced revenue growth of 22% in the controlled subsidiaries compared to same period last year which lead to the overall increase of 4% in STC group consolidated revenue for the 1st half of 2013 compared with the same period last year. During the 2nd quarter, we have witnessed growing revenues from domestic operations mainly from Aljawal BU services and Enterprise BU services increasing 7% and 8% respectively compared to same period last year. STC sees this growth sustainable short to mid-term specifically in Broadband (fixed & mobile and Business sector services. STC will continue to provide more focus on these growing sectors domestically and make all resources available in order to capture the largest share of this growth in the future..
Eng. Alsugair also stated, “the overall results for the Group were adversely impacted by the International operations both due to fair valuation of our investments in Asia (Aircel and Axis) and unrealized FX losses due to the sharp depreciation of Turkish Lira, Indian Rupee and Indonesian Rupiah
Eng. Alsugair concluded, “this negative impact from some of the international operations is not expected to continue as STC investments in Asia had been written down to its fair value, and currently, we are looking into rationalization of STC international portfolio. Currently, the management is evaluating options for some of these investments in order to take appropriate actions in the best interest of the shareholders.”
With regards to international operations, STC’s group continues to grow subsidiaries & affiliate companies operations driven by continued subscriber additions, STC’s subscriber base as of Q2, 2013 exceeded 175 million. During Q2, 2013 the group witnessed revenue growth of 22% in the controlled subsidiaries compared to same period last year. But operating profit and net profit have been impacted negatively by the following:
The operational performance of Axis, Indonesia and Binariang group (mainly due to Aircel) continued to drag the financial results of the Group.
The unrealized foreign currency exchange losses during the 1st half of 2013 amounting to SR 601 m related to Oger tel & Axis resulting from the significant depreciation in the Turkish & Indonesian Rupiah against US Dollar during the period.
Booking of one-time, non-recurring and non-cash charge of SR 1,104 million losses from fair valuation of our investments in Asia (Aircel and Axis).
While domestically, STC continues the introduction of innovative and value added services that encourage mobile usage and targeted packages bundled with advanced smart phones. This is underpinned by the Company’s customer-centric approach and its efforts to enhance the overall customers experience. These efforts are producing results, STC’s total domestic mobile customer (postpaid & prepaid) Increased 1.3% compared to same period last year.
STC continued increasing the coverage of 3G & 3.5G networks to reach various parts of the country and expanded 4G network which now has more than 7,000 sites on air. Wireless broadband customer base grew 40% during the quarter compared to the same period last year due to the launch of new products and services. As a result, wireless broadband revenues grew by 29% during the quarter compared to same period last year. Also, we have witnessed 37% growth in QuikNet sales during the quarter.
STC’s fiber optic customers (homes & Businesses) increased 273% compared to same period last year, and 17% compared to the immediate previous quarter. STC reached more than 600,000 location and 200,000 actual connected customers. The ongoing network expansion has also led to a further increase