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Riyadh, Moscow Sign MoUs in Nuclear Energy, Other Fields

The Saudi-Russian Investment Forum. SPA photo
The Saudi-Russian Investment Forum. SPA photo
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Riyadh, Moscow Sign MoUs in Nuclear Energy, Other Fields

The Saudi-Russian Investment Forum. SPA photo
The Saudi-Russian Investment Forum. SPA photo

Saudi Energy Minister Khalid al-Falih said on Thursday that King Salman’s historic visit to Russia will witness the signing of memoranda of understanding in several fields.

The visit shows the high degree of mutual trust between Russia and Saudi Arabia, Falih said, speaking alongside Russian Energy Minister Alexander Novak as part of a panel discussion at an energy forum in Moscow.

"This historic visit will witness the signing of memoranda of understanding (MoUs) in several fields that are important to both countries," Falih added.

He said MoUs would be signed with Russia for the peaceful use of nuclear energy as well as other agreements for military industries and marine development.

Russia and Saudi Arabia have helped stabilize crude prices, the minister stated.

Saudi Arabia and Russia have helped secure a deal between OPEC and 10 suppliers to cut output until the end of March 2018 in an effort to reduce a price-sapping glut.

Falih was speaking in a television interview a day after Russian President Vladimir Putin said the supply reduction deal that is due to expire in March could run to the end of next year.

"In the kingdom, we have to keep all options open, President Putin agreed with us on this and expressed his readiness to extend until the end of 2018 if this is agreed, and if this is the best option," Falih told Al Arabiya television.

He said he welcomed the "flexibility" shown by Russia on the issue and said the Saudi government aimed to "be flexible in leading the producing countries in and outside of OPEC to a consensus that takes the market to where we want it to be."

Falih said this week's visit by King Salman to Russia showed the high level of mutual trust between the world's two biggest oil producers.

The two nations would continue working to stabilize the market, King Salman told Putin. The king also said there were opportunities to expand economic cooperation with Russia.

Falih echoed these comments, saying: "I see huge opportunities in front of our countries and for the business sector in both nations."

In addition to investment agreements and MoUs, plans for a $1 billion joint fund to invest in energy projects are also expected to be finalized during the king's trip.

Falih said MoUs would be signed with Russia's state nuclear agency Rosatom for the peaceful use of nuclear energy, alongside other deals for military industries and marine development.

State oil giant Saudi Aramco will sign several non-binding MoUs on Thursday with Russian companies Gazprom , Gazprom Neft, Sibur and Litasco.

Aramco is discussing several investment opportunities with Russian firms, Aramco Chief Executive Amin Nasser said.

The Russian Direct Investment Fund will sign an MoU with Aramco and the kingdom's Public Investment Fund for investments in energy services and manufacturing.

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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.