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Al-Hogail at the Retail Leaders Circle MENA Summit: The Sector Represents 23% of Non-Oil Output

Minister of Municipal, Rural Affairs and Housing speaking during the Retail Leaders Circle MENA Summit in Riyadh. (Asharq Al-Awsat)
Minister of Municipal, Rural Affairs and Housing speaking during the Retail Leaders Circle MENA Summit in Riyadh. (Asharq Al-Awsat)
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Al-Hogail at the Retail Leaders Circle MENA Summit: The Sector Represents 23% of Non-Oil Output

Minister of Municipal, Rural Affairs and Housing speaking during the Retail Leaders Circle MENA Summit in Riyadh. (Asharq Al-Awsat)
Minister of Municipal, Rural Affairs and Housing speaking during the Retail Leaders Circle MENA Summit in Riyadh. (Asharq Al-Awsat)

Saudi Minister of Municipal, Rural Affairs and Housing, Majed Al-Hogail, said that the retail sector currently constitutes 23 percent of the non-oil GDP in the Kingdom and is expected to grow to more than SAR 460 billion ($122.6 billion) by the end of 2024.
Speaking during the 10th edition of the Retail Leaders Circle MENA Summit in Riyadh, Al-Hogail noted that the total number of active commercial licenses for the sector exceeded 400,000 licenses from 2019 until the end of 2023, as efforts to stimulate the sector resulted in the issuance of no less than 70,000 annual licenses, recording a steady growth of about 6 percent.
The minister emphasized that the Kingdom has worked to develop many legislations supporting the retail sector, with the aim to regulate its operation, sustainability and effectiveness, in addition to finding solutions, services and facilitations that encourage investors and help them overcome obstacles.
“We have made important steps towards developing the sector by enacting and introducing the necessary legislation, regulations and requirements for integration and partnership with the private sector... We have held many meetings and workshops with chambers of commerce in all regions,” with the aim of raising the standards of commercial and investment activities, updating licensing and oversight regulations and enhancing the principle of transparency in legislation and procedures,” Al-Hogail told the attendees.
He also pointed to continued efforts in cooperation with relevant authorities to build capabilities and develop skills according to the needs of the current labor market, as well as anticipating future requirements to empower the local workforce in the sector.
Al-Hogail stated that the retail sector contributes 23 percent to the non-oil GDP in the Kingdom, while the average occupancy rates of the sector in Riyadh and Jeddah reached 88 percent during 2023.
For his part, the General Supervisor of the Licensing and Compliance Agency at the Ministry of Municipal, Rural Affairs and Housing Affairs, Mohammad Al-Melhem, told Asharq Al-Awsat that as of the beginning of 2023, the ministry has worked to review all legislation related to business requirements, in cooperation with the private sector.
“Today, this qualitative change brought about by the Ministry, which will see the light at the beginning of the second quarter of 2024, will result in a major shift in terms of clarity of requirements and procedures,” he said.

 

 

 

 

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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.