Gulf kingdom's top two telcos report net profit rises of 54% and 4.5% in first quarter of 2014
Saudi Telecom Co (STC), the Gulf's No.1 telecom operator by market value, reported a 54 percent jump in first-quarter profit as provisions and losses from foreign units fell and it sold some assets.
The firm, which competes domestically with Etihad Etisalat and Zain Saudi, made a net profit of SR2.39 billion ($637.3 million) in the three months to March 31, up from SR1.55 billion in the prior-year period, it said in a statement.
Analysts polled by Reuters on average forecast STC, which owns stakes in operators in the Gulf, Turkey, South Africa and Asia, would make a quarterly profit of SR2.70 billion.
STC chairman and managing director Abdulaziz Alsugair said the company was focusing on reinforcing its presence in its home market. "At the same time, we continue to rationalise STC's international portfolio and evaluate options for some of these investments in order to take appropriate actions in the best interest of the shareholders," he said in the statement.
In the first quarter of 2013, STC took an impairment of SR500 million on its Indian unit Aircel and a SR287 million loss on Indonesian subsidiary Axis. In this year's first quarter STC has not taken impairments on Aircel and has sold Axis. STC sold assets worth SR277 million in the first quarter.
The former monopoly reduced losses from investments to SR107 million in the first quarter from SR516 million a year earlier due to a change in the accounting treatment for Aircel.
Quarterly revenue was SR10.78 billion, down from SR11.47 billion a year earlier.
STC's board of directors has approved a quarterly dividend of 0.75 riyals per share.
Separately, Etihad Etisalat (Mobily), Saudi Arabia's No.2 telecom operator, missed forecasts with a 4.5 percent rise in first-quarter net profit on Monday.
Mobily, an affiliate of the United Arab Emirates' Etisalat , made a first-quarter net profit of SR1.4 billion ($373.3 million), up from SR1.34 billion in the prior-year period, it said in a bourse filing.
Analysts polled by Reuters on average forecast Mobily, which competes with the Gulf's No.1 operator Saudi Telecom Co (STC) and Zain Saudi, would make a quarterly profit of SR1.52 billion.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.