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Bahrain: Oil Drives Economic Growth

A view of Manama. Hamad I Mohammed / Reuters
A view of Manama. Hamad I Mohammed / Reuters
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Bahrain: Oil Drives Economic Growth

A view of Manama. Hamad I Mohammed / Reuters
A view of Manama. Hamad I Mohammed / Reuters

Non-oil sector in Bahrain expanded by an annual pace of 4.7% in the first half of the 2017, compared to 4.0 percent in 2016, according to the most recent Bahrain Economic Quarterly published by the Bahrain Economic Development Board (EDB).

The strong non-oil progress was entirely due to private sector activity, which underscored the strength of growth drivers and steps taken to cope with economic fluctuations in Bahrain, also consolidated Bahrain economy flexibility despite the drop of oil prices to the lowest rate.

“Non-oil growth in the first half of 2017 was broad-based with particularly strong momentum observed in sectors such as Hotels & Restaurants, Social & Personal Services and Financial Services, which all expanded more than 7% year-on-year in the period. Additionally, the Transportation & Communications and Real Estate & Business Activities sectors all posted solid figures,” the press release published by the EDB read.

Commenting on the quarterly performance, Dr. Jarmo Kotilaine, Chief Economic Advisor of the Bahrain EDB, said that the continuous growth figures attest to the exceptional strength and resilience of taken steps to overcome economic fluctuations in Bahrain’s economy.

“However, growth is also increasingly benefiting from important structural reforms. During the first half of this year, initiatives such as pioneering crowdfunding regulations, a regulatory sandbox for fin-tech companies and a Cloud First policy (designed to help organizations take advantage of cloud technology), have dramatically improved Bahrain’s business environment,” he stated.

Kotilaine added, “Bahrain is successfully positioning itself at the forefront of innovation at a time when the growth prospects for the Gulf economies are becoming increasingly tied to productivity.”

Further, he signaled that Bahrain managed to attract prime figures in the business field including Amazon Web Services, which will be opening its first Middle East Region in Bahrain by 2019.

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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.