World Defense Show Concludes in Riyadh with $7 Bn Contracts

The second edition of the World Defense Show 2024 concluded in Riyadh with the signing of 61 purchase contracts worth $7 billion.

Over 773 participants and more than 441 Saudi delegations representing 116 countries participated in the show, and more than 106,000 visitors arrived at the pavilion.

The show also witnessed the signing of 73 agreements, including 17 industrial participation agreements.

Governor of General Authority for Military Industries (GAMI) Ahmed al-Ohali asserted that the event succeeded in linking industry leaders with innovators worldwide.

Several Saudi investors participating in the show stressed the importance of the event, describing it as a platform for building alliances with international companies specialized in the defense and military industries.

They also indicated that it represented a chance for foreign investors to learn about Saudi projects and witness the changes and qualitative renaissance in the Kingdom.

The investors pointed out that this edition paved the way for global markets to enter the defense and security industry in the Kingdom.

The exhibition has also become an influential global platform for achieving communication, exchanging knowledge, and building business relationships worldwide.

It also enables exhibitors and investors to learn about this field's latest innovations and technologies.

Asharq Al-Awsat met with local company representatives on the sidelines of the event.

During the exclusive interviews, they stated that the pavilion brings together several major companies that lead the global defense industries.

They stressed that such a category accelerates the sector's localization process by more than 50 percent, according to the targets of Vision 2030 to reduce military spending.

GAMI governor said at the event's inauguration that the Kingdom has begun to reap the fruits of government support to increase and develop military-industrial capabilities to 13.6 percent by the end of 2022.

- Explore opportunities

The CEO of Aircraft Accessories and Components Company (AACC), Mansour al-Eid, told Asharq Al-Awsat that the exhibition is an opportunity to build alliances with international companies, as it brings all investors and those interested in the sector under one roof.

Eid noted that the event saves time, effort, and money, allowing local companies to search for partnerships with international capitals specialized in military industries.

He noted that 70% of the AACC alliances with its global counterparts occurred during this exhibition and other exhibitions in this field, including cooperation with Chinese, European, and Turkish companies.

Eid stressed that the second edition brought together many specialized international companies, providing an excellent opportunity for its local counterparts.

He pointed out that this edition allowed global markets to enter the defense and security industry market in the Kingdom.

- Artificial intelligence

Eid explained that localization of the industry boils down to qualifying Saudis to specialize in this industry, adding that the government is working in this direction.

The private sector has a significant role, said Eid, adding that it is the engine of the economy and develops the industry, asserting that "investing in mind" will positively impact national companies.

The CEO added that the percentage of Saudization in his company reached 67%, and Saudi youth are attracted to artificial intelligence and aircraft operations.

He added that employment in artificial intelligence is one of the jobs that most require a period to invest and develop human resources.

- Integration between entities

For his part, the Director of Aeronautical and Mechanical Engineering at Intra Defense Technologies, Asim al-Rebdi, told Asharq Al-Awsat that the exhibition in its current edition has many positive revenues centered around integration between relevant authorities, customers, and legislative authorities.

Rebdi indicated that Intra displayed national solutions, which the company worked to develop and manufacture to cover the needs of the armed forces and security agencies.

According to the expert, Intra relies on its national cadres to develop and manufacture drones to achieve the vision of localizing 50% of military spending by 2030.

It also highlights national capabilities in the military and security fields by including local companies.

He told Asharq Al-Awsat about Intra's Samoum, saying the Unmanned Aircraft System (UAS) is an operational-class drone equipped with advanced payloads and sensors, including radars and optical systems.

Samoum is the final developed model, and the device is now in the testing stages, said Rebdi, noting that the company aims to complete the project during the next year to be ready to enter into the service.

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.

World Defense Show Concludes in Riyadh with $7 Bn Contracts