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Sales of Saudi Cement Companies Fall 7% in October

CMA
CMA
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Sales of Saudi Cement Companies Fall 7% in October

CMA
CMA

Sales of Saudi cement companies are expected to rise after witnessing significant decline in recent months, which contributed to the low profitability of firms in the sector.

The latest data on sales of Saudi cement companies issued monthly showed that aggregate sales of 17 listed firms dropped seven percent to 4.10 million tons in October 2017, from 4.43 million tons in October 2016.

The only seven percent drop in sales in October confirms the improvement in the local real estate market in light of the increasing number of programs of the Ministry of Housing and the implementation of several government projects at the infrastructure level.

As Saudi Arabia moves towards a more expanding budget in 2018, according to Finance Minister Mohammed al-Jadaan, local cement companies are facing a new opportunity to increase sales and direct most of their production to the local market.

This comes despite the fact that some of these firms have obtained overseas export licenses during the past few months.

Saudi Arabia's cement companies posted a 58.7 percent drop in profits in the first nine months of the year compared to the same period last year.

On the other hand, Saudi Arabia Stock Market (TASI) increased 18 points or 0.26 percent to 6,954 on November 9 from 6,936 in the previous trading session.

During last week’s trades, cash flow rates increased by 22.5 billion riyals ($6 billion) compared to 15.9 billion riyals ($4.24 billion) during the previous week.

These new developments came at a time when the board of the Capital Market Authority (CMA) issued a resolution to adopt the updated Mergers and Acquisitions list, replacing the one adopted in 2007, with the updated list coming into force last Thursday.

This list proves the efforts of the CMA to regulate mergers and acquisitions in line with the best international practices in the field of mergers and acquisitions and with the powers conferred by the new corporate system in the Authority in respect with merger processes, one of which is a listed company in the Saudi Stock Exchange market, contributing to the implementation of the program of the CMA to achieve the Kingdom Vision 2030.

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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.