Saudi Telecom Co posts 8.7% decline in second-quarter profit, misses analyst estimates
Saudi Telecom Co (STC), the Gulf's biggest telecom operator by market value, blamed rising costs as it posted an 8.7 percent fall in second-quarter profit on Wednesday to extend a profit slump and miss analyst estimates.
The firm, which competes domestically with Etihad Etisalat (Mobily) and Zain Saudi, made a net profit of 2.56 billion riyals ($683 million) in the three months to June 30, down from 2.80 billion riyals in the prior-year period, according to a bourse statement.
Analysts polled by Reuters had on average forecast STC, which owns stakes in operators in the Gulf, Turkey, South Africa and Asia, would make a quarterly profit of 2.94 billion riyals.
STC said general and administrative costs, plus amortisation and depreciation costs, rose by a combined 246 million riyals in the second quarter, while taxes and employee retirement payouts together increased 178 million riyals.
Quarterly revenue grew 4.3 percent to 12.22 million riyals.
STC reported falling profits in two of the preceding three quarters, stalling an improvement in its bottom line that had been due to trimming its international ambitions and refocusing on its lucrative home market.
In February, the telecommunications regulator announced it would cut interconnection costs, a move seen helping loss-making number three player Zain Saudi win market share.For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.