عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Reforms Facilitating Business Boost Investment in Saudi Arabia

Cars drive past the King Abdullah Financial District, north of Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser/File Photo
Cars drive past the King Abdullah Financial District, north of Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser/File Photo
TT
TT

Reforms Facilitating Business Boost Investment in Saudi Arabia

Cars drive past the King Abdullah Financial District, north of Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser/File Photo
Cars drive past the King Abdullah Financial District, north of Riyadh, Saudi Arabia, March 1, 2017. REUTERS/Faisal Al Nasser/File Photo

The investment climate in Saudi Arabia enjoys an advanced position among world economies. This climate resulted from the record-breaking number of reforms carried out by the kingdom, as part of its pursuit to enhance business climate for small and medium projects.

The report issued by the World Bank Doing Business 2018 confirmed this fact.

The report, released on Thursday, showed that the kingdom conducted six reforms - the highest number of reforms in the MENA in 2017.

The kingdom implemented 30 reforms since 2003, majorly focusing on starting business (seven reforms), real-estate registration (five reforms) and getting credit (four reforms), showed the report. It added that now it takes 18 days to start a business in Riyadh compared to 81.5 days, 15 years ago.

The report revealed that procedures to start business were facilitated through installing an e-system. As for real-estate registration, efficiency in administering lands has been enhanced through developing an e-portal.

Further, protection of minority investment was consolidated through increasing shareholders rights and their role in major decisions, setting conditions to increase transparency and organize disclosure. Also, time required for importing and exporting has been shortened through reducing required documents for the customs.

Rita Ramalho, Acting Director of the World Bank's Global Indicators Group, declared that the completed reforms during the last year are quite comprehensive and they cover six out of 10 fields linked to the business performance used to determine the countries' position.

The kingdom’s performance is considered good in regards to protecting minority’s investors (10th rank worldwide), and it occupies rank 24 as to property registration and rank 38 in granting licenses.

Nader Mohamed, Country Director of the GCC Countries in the MENA region of the World Bank, stated that the huge progress achieved by the kingdom in one year is a proof of the government commitment to reform investment climate.

Mohamed pointed out that the coordinated efforts among governmental parties send a strong indicator for investors interested in the kingdom – he noted that the World Bank is delighted with the foundation in which reforms were based, ensuring that the ambitious vision of the kingdom requires succession and continuity of economic reforms.

He described ongoing reforms that aim at reducing dependency on oil as significant, the thing that demands transferring five percent of Aramco and supporting the Public Investment Fund of Saudi Arabia to become the biggest sovereign fund in the world.

Most Viewed

 
 
Business

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)
TT
TT

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.