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Saudi Arabia's PIF Raises $5Bn from Syndicated Loan

In March 2022, Saudi Arabia’s Public Investment Fund (PIF) and K-SURE signed a memorandum of understanding (MoU) expressing mutual intention to strengthen their partnership and cooperation (Asharq Al-Awsat)
In March 2022, Saudi Arabia’s Public Investment Fund (PIF) and K-SURE signed a memorandum of understanding (MoU) expressing mutual intention to strengthen their partnership and cooperation (Asharq Al-Awsat)
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Saudi Arabia's PIF Raises $5Bn from Syndicated Loan

In March 2022, Saudi Arabia’s Public Investment Fund (PIF) and K-SURE signed a memorandum of understanding (MoU) expressing mutual intention to strengthen their partnership and cooperation (Asharq Al-Awsat)
In March 2022, Saudi Arabia’s Public Investment Fund (PIF) and K-SURE signed a memorandum of understanding (MoU) expressing mutual intention to strengthen their partnership and cooperation (Asharq Al-Awsat)

Saudi Arabia’s Public Investment Fund (PIF) and Korea Trade Insurance Corporation (K-SURE) signed on Nov. 28 a financing agreement through which PIF has secured a term loan, from a syndicate of nine top international lenders.
The financing carries a door-to-door tenor of 13 years and will initially be set at $3 billion (nearly SAR 11.2 billion), with an option to increase to $5 billion (nearly SAR 18.7 billion), subject to pre-agreed terms and conditions.
The transaction will mark PIF’s first financing covered by an export credit agency, as it continues to diversify its sources of funding.
In March 2022, PIF and K-SURE signed a memorandum of understanding (MoU) expressing mutual intention to strengthen their partnership and cooperation. This resulted in achieving, among other matters, the K-SURE covered term loan.
The collaboration between PIF and K-SURE aims to promote the export of Korean goods and services into various projects and subsidiaries either partially or fully owned by PIF while strengthening economic partnerships.
“This collaboration with K-SURE underscores PIF's commitment to foster institutional partnerships as we continue to deliver on our medium-term capital raising strategy,” said Fahad AlSaif, Head of the Global Capital Finance Division at PIF.

“The financing is part of PIF’s four primary sources of funding and strengthens economic ties between Saudi Arabian and South Korean businesses,” he added.
“Through this financial support, Korean companies have not only gained technological competitiveness but also financial competitiveness to increase orders,” said Inho Lee, President of K-SURE.
“We trust this support will contribute to strengthening the future-focused partnership between the two countries,” he added.
This financial agreement marks a continuation of PIF’s efforts to diversify its funding sources.
Recently, it successfully issued international bonds totaling $3.5 billion.

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Business

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.