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Saudi Revenues Grow 57% during Q3 2018

A Saudi money changer, pictured through a glass, arranges US banknotes at a currency exchange shop in Riyadh, Saudi Arabia on September 29, 2016. REUTERS/Faisal Al Nasser
A Saudi money changer, pictured through a glass, arranges US banknotes at a currency exchange shop in Riyadh, Saudi Arabia on September 29, 2016. REUTERS/Faisal Al Nasser
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Saudi Revenues Grow 57% during Q3 2018

A Saudi money changer, pictured through a glass, arranges US banknotes at a currency exchange shop in Riyadh, Saudi Arabia on September 29, 2016. REUTERS/Faisal Al Nasser
A Saudi money changer, pictured through a glass, arranges US banknotes at a currency exchange shop in Riyadh, Saudi Arabia on September 29, 2016. REUTERS/Faisal Al Nasser

Saudi Arabia's government revenues hit SAR223.26 billion (USD59.5 billion) for the third quarter — an increase of 57 percent compared to the same period last year. Revenues in the first nine months increased by nearly 47 percent to SAR663.1 billion (USD176.8 billion) compared to the same period in 2017.

The Saudi finance ministry has published the quarterly report of the state budget performance of the third quarter of 2018 on its website.

The non-oil revenues in the first nine months of the year hit SAR211.05 billion (USD56.28 billion) — a year-on-year increase of 48 percent. Oil revenue rose 63 percent to SAR153.95 billion (USD41 billion) during the third quarter, compared to the same period last year.

Although the deficit has fallen, government expenditure increased by 25 percent in the first nine months of the year, reaching SAR712.09 billion (USD189.9 billion).

“The improvement in fiscal performance is reflected by the decrease in the deficit with positive oil and non-oil growth, compared to the same period in 2017, and the planned budget,” Finance Minister Mohammed al-Jadaan said in a statement.

“Regardless of the Q3 positive indicators, challenges in the public finances still exist and require us to maintain our efforts to move forward with our reforms," he added.

“The announced Q3 2018 fiscal figures reflect the improved performance of the public finances during this year,” said Jadaan.

“While clearly assisted by improvements in the oil price internationally, these figures also show the fruits of the successful implementation of many initiatives to develop non-oil revenues and improve spending efficiency,” he added.

These developments coincide with a time when Moody’s Investors Service revealed that Saudi Arabia’s economic growth is set to rise to 2.5 percent by the end of this year and 2.7 percent in 2019. Moody’s has given the kingdom an A1 ‘stable’ rating.

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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.