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Saudi Telecom's Q3 net profit falls 31pc

RIYADH, October 20, 2015

Saudi Telecom Company (STC), the Gulf's biggest telecom operator by market value, reported a 31 per cent drop in its third-quarter net profit on Tuesday, missing estimates as higher costs and expenses more than offset a growth in revenue.

It is the fourth quarter in the last five in which STC has reported falling profits, with the first quarter this year proving the exception.

The former monopoly operator made a net profit of SR2.32 billion ($618.7 million) in the three months to September 30, down from SR3.37 billion a year before. Analysts polled by Reuters had on average forecast STC would make SR3.06 billion.

Weighing on the results was an increase of SR1.14 billion in service costs and a rise of SR505 million in operating expenses, it said without elaborating.

There was also a drop of SR573 million in net 'other income and expenses', due to costs related to an early retirement programme and foreign exchange losses primarily linked to the Turkish lira.

These factors offset a 9.7 per cent increase in revenue, which climbed to SR12.895 billion from SR11.75 billion a year earlier.

Boosting revenue was a five per cent rise in mobile working lines year on year, while the company noted "continuous strong growth in data traffic" as it builds out its 4G mobile broadband network in Saudi Arabia.

In September, STC's chief executive told Reuters his firm would spend another $1 billion in the second half of 2015 on improving its networks as it tries to meet surging demand for web-based services.

The company competes domestically with Etihad Etisalat (Mobily) and Zain Saudi, and own stakes in operators in the Gulf, Turkey, South Africa and Asia.-Reuters




Tags: Saudi Telecom | profit |

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