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100 Saudi Firms Listed in the Local Market See 2.46% Profit Increase

A Saudi man counts banknotes at his jewelry shop at Tiba market in Riyadh, on October 3, 2016. (AFP/ Getty Images)
A Saudi man counts banknotes at his jewelry shop at Tiba market in Riyadh, on October 3, 2016. (AFP/ Getty Images)
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100 Saudi Firms Listed in the Local Market See 2.46% Profit Increase

A Saudi man counts banknotes at his jewelry shop at Tiba market in Riyadh, on October 3, 2016. (AFP/ Getty Images)
A Saudi man counts banknotes at his jewelry shop at Tiba market in Riyadh, on October 3, 2016. (AFP/ Getty Images)

Total profit of 100 Saudi firms listed in the local market saw a rise of 2.46 percent compared to the same period of 2017, amounting to $14.5 billion, according to the companies’ financial results for the first half of this year.

The profits were majorly gained from banking and petrochemical industries, as they embrace the largest Saudi companies in terms of capital and revenues. The rest of the companies are expected to announce their results on August 9.

The Saudi Stock Market closed this week 1.36 percent down, at 8,254 points, compared to last week's results at 8368 points.

Last week’s total tradings increased significantly, reaching up to $4.9 billion, compared to $4.2 billion in the previous week.

Saudi Ministry of Commerce and Investment revealed in its recent statements that the level of profitability of the private sector is an important indicator that will boost confidence levels and increase investments in the country.

The positive figures announced by the Saudi Ministry come in line with recent figures published by Saudi companies listed in the local financial market. The numbers showed positive growth rates in listed companies during the first half of this year, compared to the profit levels of 2017.

The Ministry confirmed last week that companies and institutions operating in the Saudi market showed a 5.6 percent growth in profits during 2017 and a 1.7 percent revenue growth during the same year when compared with 2016.

Recent statistics of Qawaem, the electronic filing program of financial lists, showed that profit had been achieved in listed and non-listed companies and institutions of various sectors.

The report identified the sectors that saw the highest growth levels during 2017: management consultancy, machinery and equipment manufacturing, mining and recycling, natural gas, financial advisory, training, education, administrative facilities, maintenance and hygiene, agricultural activities and stores of pharmaceutical and medical supplies.

The Saudi economy, the largest in the Middle East, achieved a positive growth in the first quarter of this year, at 1.2 percent, a sign on the feasibility of economic reforms that are aimed at diversifying the economy and reducing oil dependency.

Saudi GDP rose 1.2 percent at the end of the first quarter to reach $172.7 billion compared to $170.7 billion during the same period last year, General Authority for Statistics (GAStat) data showed.

Non-oil GDP increased 1.6 percent by the end of the first quarter of this year, while non-oil governmental sector showed a 2.7 percent increase during same period.

GDP of the oil sector rose 0.6 percent to $72.8 billion compared to $72.4 billion of the first quarter of previous year.

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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.