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Riyadh Municipality Adopts New Approach to Boost Business Compliance

An employee of “Ejada” performs inspection duties at a commercial shop. Asharq Al-Awsat
An employee of “Ejada” performs inspection duties at a commercial shop. Asharq Al-Awsat
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Riyadh Municipality Adopts New Approach to Boost Business Compliance

An employee of “Ejada” performs inspection duties at a commercial shop. Asharq Al-Awsat
An employee of “Ejada” performs inspection duties at a commercial shop. Asharq Al-Awsat

Riyadh Municipality has introduced a new model for inspection and oversight aimed at promoting compliance culture and raising awareness of regulatory laws among targeted institutions.

The initiative aims to ease financial burdens on businesses, ensuring their sustainability in the market.

In 2018, Riyadh Municipality launched the “Ejada” initiative in line with Vision 2030’s municipal transformation goals to enhance oversight of municipal services. However, its previous focus on fines to increase revenue burdened small and medium-sized enterprises.

Acknowledging this, Riyadh Governor Prince Faisal bin Ayyaf stated that the current approach shifts towards incentivizing compliance rather than solely relying on fines, aiming to boost returns for companies and compliance rates.

Prince Faisal bin Ayyaf recently announced the “Muthal” municipal compliance program to enhance service quality in Riyadh’s health and commercial sectors, leveraging digital technologies.

Emphasizing sustainable development, Riyadh Municipality aims to strengthen the business environment, support the private sector, and promote compliance through partnerships, ensuring regulatory quality and stakeholder satisfaction, aligned with the Kingdom’s national transformation plan, Vision 2030.

Economic experts believe the new model will ease financial pressures on businesses while encouraging better compliance with municipal regulations.

Ahmed Al-Jubeir, an economic specialist, noted to Asharq Al-Awsat that previous oversight lacked preventive measures and awareness, primarily relying on fines.

The new model encourages cooperation with monitors and compliance with regulations, fostering sustainable private sector development.

Al-Jubeir further indicated that the new model will incentivize the private sector and reduce financial burdens on establishments in the labor market.

On the other hand, Ahmed Al-Shahri, a policy expert, clarified to Asharq Al-Awsat that the new program ensures improved regulatory processes, enhances service quality, boosts awareness, and compliance rates of establishments, employing state-of-the-art technologies.

This aligns with municipal transformation initiatives derived from Vision 2030.

Riyadh Municipality’s initiatives aim to enhance regulatory efficiency and support business integrity, contributing to sustainable community development.

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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.