Saudi Telecom reports 11% drop in Q1 net profit

State-owned telco says fall in profits due to bonus salaries ordered by King Abdullah
Saudi Telecom reports 11% drop in Q1 net profit
By Reuters
Tue 19 Apr 2011 09:27 PM

State-owned Saudi Telecom

(STC) reported a 11 percent fall in first-quarter net

profit due to bonus salaries ordered by King Abdullah, missing

analysts' average estimates.

The firm made a net profit of SR1.573 billion in

($419.5 million) the three months to March 31, compared to 1.772

billion in the year-earlier period, according to a bourse

statement on Tuesday.

Analysts surveyed by Reuters had expected Saudi Telecom to

make an average of SR2.04 billion in net profit.

STC blamed the profit fall on extra salary costs of 375

million riyals under handouts ordered by the king since his

return from sick leave abroad in February.

"Without this cost ... there would have been a 10 percent

rise of profit compared to the same quarter last year," STC

said.

King Abdullah has given handouts worth around $130 billion

for citizens, among them two extra salaries for state employees,

in a bid to insulate the kingdom from Arab protests.

Revenues rose by 4 percent to SR13.07 billion in the

quarter, it said, citing a rising number of clients and market

share.

Earnings per share fell to 0.79 riyals from 0.89 riyals in

the same quarter a year ago.

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