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SRC, Dar Al Tamleek Ink New Agreement for Housing Funds

A man walks past the Kingdom Centre Tower in Riyadh, Saudi Arabia April 12, 2016. REUTERS/Faisal Al Nasser
A man walks past the Kingdom Centre Tower in Riyadh, Saudi Arabia April 12, 2016. REUTERS/Faisal Al Nasser
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SRC, Dar Al Tamleek Ink New Agreement for Housing Funds

A man walks past the Kingdom Centre Tower in Riyadh, Saudi Arabia April 12, 2016. REUTERS/Faisal Al Nasser
A man walks past the Kingdom Centre Tower in Riyadh, Saudi Arabia April 12, 2016. REUTERS/Faisal Al Nasser

Meeting a growing demand for Saudi housing funds, the Saudi Real Estate Refinance Company (SRC) signed a SAR 1.2 billion (approximately $ 320 million) deal with Dar Al Tamleek.

Dar Al Tamleek was launched in 2008 with a vision to become the Kingdom's leading expert in home financing solutions, helping people realize their goal of purchasing homes. It operates in major cities like Riyadh, Jeddah, and Dammam along with 12 other branch locations serving over 80% of the Saudi population.

The deal aims to buy a residential finance portfolio currently owned by Dar Al Tamleek and provide short-term financing over 18 months to the company.

It was inked by SRC CEO Fabrice Susini and Dar Al Tamleek CEO Yasser Abu Ateeq. This is the fifth agreement signed by the two parties, confirming the importance of the Saudi public-private sector partnership, which aims to inject more funds into the housing finance market.

SRC said that such agreements aim to empower more citizens to own homes, and to implement the Kingdom Vision 2030’s plan for the housing sector.

This is a step towards the company's goal of enabling lenders to offer more affordable housing solutions, said Fabrice Susini.

He also expressed SRC’s desire to continue its partnership with various residential finance companies and institutions.

Real estate funds are often considered one of the investment fields often seeking liquidity. However, a decline in profitability may bring unit prices downwards, forcing fund managers to increase their efforts to achieve the desired benchmark for profit set by investors.

These developments come as the Saudi economy, the largest in the Middle East, achieved positive growth set at 1.2% in its first quarter of 2018, further consolidating the feasibility of objectives for economic reform, objectives for diversifying the national economy and reducing oil dependence.

Non-oil GDP rose by 1.6% reaching SAR 371.02 billion riyals ($ 98.9 billion) at the end of the first quarter of 2018, compared with the same period in 2017.

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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.