x Abu Dhabi, UAE Thursday 20 July 2017

Saudi Telecom profit lower after taking hits in South Africa and India

Saudi Telecom reported a 79 per cent fall in fourth-quarter profit on Monday, missing market expectations, after it took one-time charges related to affiliates in South Africa and India.

Saudi Telecom reported a 79 per cent fall in fourth-quarter profit on Monday, missing market expectations, after it took one-time charges related to affiliates in South Africa and India.

STC, which is majority government-owned, made a net profit of 468 million Saudi riyals in the three months to December 31, down from a 2.28bn riyals in the prior-year period.

Analysts polled by Reuters on average forecast STC - the largest Gulf telecom operator by market value, with operations from Indonesia to Turkey - would make a quarterly profit of 2.4bn riyals.

The former monopoly attributed the fall in net profit to charges on adjusting the fair value on its investment in South Africa's Cell C and Aircel in India - leading to a one-off non-cash charge of 641 million riyals - and changes in Indian telecom regulations which resulted in a charge of 544m riyals, related to Aircel.

Quarterly operating income fell 32.5 per cent to 1.9bn riyals.

Revenue from services for the fourth quarter fell 1.7 per cent to 15bn riyals compared with 15.2bn riyals for the corresponding quarter last year.

Full-year profit for 2012 was 7.4bn riyals, down from 7.7bn riyals in 2011.

Soaring demand for broadband has lifted earnings in recent quarters, with STC offering bundle packages to woo customers back from rival operators Etihad Etisalat (Mobily) - an affiliate of UAE operator Etisalat, and Zain Saudi - part-owned by Kuwaiti group Zain.

STC said in a separate statement that it would issue a 0.5 riyal per share dividend for the fourth quarter.

 

* Reuters