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Israel Finance Minister: Moody's Downgrade Unreasonable, Politicized

People look at an installation with candles which makes out the number of days the hostages have been captive since October 7, as people begin to gather for a protest against Israeli Prime Minister Benjamin Netanyahu's government, at Habima Square in Tel Aviv, Israel, February 10, 2024. REUTERS/Susana Vera
People look at an installation with candles which makes out the number of days the hostages have been captive since October 7, as people begin to gather for a protest against Israeli Prime Minister Benjamin Netanyahu's government, at Habima Square in Tel Aviv, Israel, February 10, 2024. REUTERS/Susana Vera
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Israel Finance Minister: Moody's Downgrade Unreasonable, Politicized

People look at an installation with candles which makes out the number of days the hostages have been captive since October 7, as people begin to gather for a protest against Israeli Prime Minister Benjamin Netanyahu's government, at Habima Square in Tel Aviv, Israel, February 10, 2024. REUTERS/Susana Vera
People look at an installation with candles which makes out the number of days the hostages have been captive since October 7, as people begin to gather for a protest against Israeli Prime Minister Benjamin Netanyahu's government, at Habima Square in Tel Aviv, Israel, February 10, 2024. REUTERS/Susana Vera

Israeli Finance Minister Bezalel Smotrich on Saturday brushed off a Moody's downgrading of Israel's credit rating, saying the decision linked to the Gaza war was not based on sound economic reasoning and was tantamount to a pessimistic "manifesto.”
"The Israeli economy is strong by all measures. It is capable of sustaining all war efforts, on the front line and home front, until, with God's help, victory is achieved," he said in a response to the decision published on Friday.
Citing material political and fiscal risks for Israel from its war with the Palestinian militant group Hamas, raging since October, Moody's cut the country's rating to "A2", which is five notches above investment grade, while its credit outlook was kept at negative, meaning a further downgrade is possible.
The agency said it expects Israel's debt burden to be "materially higher" than projected before the conflict and defense spending to be nearly double the level of 2022 by the end of this year in its baseline scenario.

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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.