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Japan Ready to Support Saudi SMEs, Increase Joint Investments

Japanese Prime Minister Shinzo Abe signs a business agreement after a conference at King Abdulaziz University in Jeddah, May 1, 2013. (Reuters)
Japanese Prime Minister Shinzo Abe signs a business agreement after a conference at King Abdulaziz University in Jeddah, May 1, 2013. (Reuters)
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Japan Ready to Support Saudi SMEs, Increase Joint Investments

Japanese Prime Minister Shinzo Abe signs a business agreement after a conference at King Abdulaziz University in Jeddah, May 1, 2013. (Reuters)
Japanese Prime Minister Shinzo Abe signs a business agreement after a conference at King Abdulaziz University in Jeddah, May 1, 2013. (Reuters)

The Saudi-Japanese Business Council discussed on Monday in Riyadh means to overcome obstacles, bolster investments and support the small and medium-sized enterprises (SMEs) sector.

The council said that recent talks between the two countries paved the way for increasing the volume of bilateral trade to reach around $27 billion in 2016, adding that about 6 percent of the Kingdom’s total imports came from Japan, while around 11 percent of Saudi exports were directed toward the Asian country.

Tareq al-Qahtani, head of the Saudi side of the Saudi-Japanese Business Council, noted that Saudi Arabia was one of the countries that attracts foreign investments due to the abundance of natural resources and its economic, political and social stability.

He said he hoped investments would increase remarkably with the establishment of the Saudi-Japanese Investment Company and the implementation of programs aimed at promoting trade and attracting further investments within the framework of Saudi Vision 2030.

The joint meeting held on Monday between the Saudi-Japanese Business Council and the Council of Saudi Chambers reviewed ways to enhance trade and investment relations between the business sectors and introduce investment opportunities available in both countries. It was attended by about 100 Saudi and Japanese investors and representatives of Saudi and Japanese companies operating in different sectors.

For his part, Hiroshi Saito, chairman of the Council’s Japanese side, reaffirmed his country’s readiness to strengthen cooperation with the Kingdom in various sectors and exchange expertise in areas of mutual interest in the light of the Saudi-Japanese Vision 2030.

The Japanese official underlined the importance of enhancing trade cooperation to boost the volume of trade exchange and opening the door to investment to the private sector to reach wider horizons for joint cooperation.

He also expressed his country’s willingness to support the Saudi SMEs sector, noting that Japan had a distinguished experience in this regard.

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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.