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Space Industry: A New Sector Begins in Saudi Arabia’s Economic Diversification Efforts

Falcon 9 Rocket Carrying Saudi Astronauts to the International Space Station (Asharq Al-Awsat)
Falcon 9 Rocket Carrying Saudi Astronauts to the International Space Station (Asharq Al-Awsat)
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Space Industry: A New Sector Begins in Saudi Arabia’s Economic Diversification Efforts

Falcon 9 Rocket Carrying Saudi Astronauts to the International Space Station (Asharq Al-Awsat)
Falcon 9 Rocket Carrying Saudi Astronauts to the International Space Station (Asharq Al-Awsat)

In a momentous endeavor, the Falcon 9 rocket embarked on a triumphant mission, ferrying Saudi astronauts Ali Al-Qarni and Rayana Barnawi to the International Space Station.

This pivotal event is anticipated to herald a significant advancement for Saudi Arabia’s expanding economic landscape.

Aligned with the visionary objectives of Vision 2030, the mission symbolizes the nation’s steadfast commitment to diversifying its economy through the establishment of cutting-edge industries.

As the global aerospace sector witnessed an astonishing 13% growth rate in 2022, resulting in a staggering $400 billion valuation, and with projections indicating a potential surge to $2 trillion by 2040, Saudi Arabia is diligently working towards securing its role as a key player in this thriving international arena.

Leveraging its extensive capacities across diverse domains, notably in manufacturing encompassing metals, petrochemicals, and bolstered by its strategic logistical position, the Kingdom is resolute in establishing a prominent presence within the aerospace industry.

According to experts surveyed by Asharq Al-Awsat, the Saudi government has undertaken significant measures in recent years to establish the necessary infrastructure and develop a skilled workforce in the pursuit of space exploration.

This includes the establishment of a specialized authority and a Supreme Space Council, led by Crown Prince Mohammed bin Salman, who is also the Prime Minister.

These initiatives provide a strong impetus to achieve set goals and contribute to the historic achievements of the country.

Speaking to Asharq Al-Awsat, space expert Mulhim Hindi affirmed that the Saudi space strategic plan is long-term and aims to achieve significant national accomplishments and economic returns. It seeks to build a new industry and localize it to diversify sources of income.

Hindi then mentioned that Riyadh has various avenues to enter the field of space, ranging from rocket structure manufacturing to its distinguished mining industries.

Additionally, the petrochemical sector plays a crucial role, as there will be an increasing demand for it as rocket fuel.

Hindi also noted that countries will compete to secure sufficient reserves of petrochemicals to ensure the continuity of their aerospace industry.

As part of Saudi Arabia’s strategy, these industries are planned to be fully localized within the Kingdom, including the construction of space rocket launch platforms, added Hindi.

 

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.