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131 Saudi Companies Achieve $22 Mn Profits in 9 Months

131 Saudi Companies Achieve $22 Mn Profits in 9 Months
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131 Saudi Companies Achieve $22 Mn Profits in 9 Months

131 Saudi Companies Achieve $22 Mn Profits in 9 Months

The financial results of the first nine months of 2018 for 131 Saudi companies, which are listed in the local stock market, were announced on Friday.

The results revealed a profit of SAR82.8 billion ($22 billion), marking a growth of more than 11 percent compared to the same period last year, underlining the strength of the Saudi economy.

More Saudi companies are expected to announce their financial results on Sunday while firms listed on the Saudi stock exchange are expected to achieve profits of more than SAR100 billion ($26.6 billion) in 2018.

In this context, the Saudi Stock Exchange (Tadawul) ended the week on a negative note, as the Tadawul All Share Index (TASI) lost 1.7 percent, and closed at the level of 7,743.39 points, 136 points less.

This came in the wake of natural profit gains after the index rose for three consecutive weeks.

Total traded values fell 19.36 percent to SAR13.85 billion while traded volumes declined by 21.57 percent to 638.35 million shares.

These developments come as Saudi revenues grew during the third quarter of this year by 57 percent compared to the same period last year.

Meanwhile, the total revenues from the beginning of the year to the end of the third quarter amounted to SAR663.1 billion ($176.8 billion), recording a growth of 47 percent compared to the same period last year (the first nine months of 2017).

The Saudi Ministry of Finance published Wednesday on its website the quarterly budget performance report for the third quarter of fiscal year 2018, which emphasizes the government's commitment to transparency and financial disclosure.

Indicators of this report revealed a decrease in the deficit compared to the same period of the previous year, supported by a significant positive growth in oil and non-oil revenues, which emphasizes the effectiveness of economic reforms and fiscal measures aimed at sustaining public finances.

In addition to that, Moody's Investor Service affirmed the Kingdom's “A1” rating with a stable outlook and raised its GDP growth forecasts for the period (2018-2019) to 2.5 percent and 2.7 percent respectively, instead of its previous expectations of 1.3 percent and 1.5 percent for the same period reported in April this year.

These revised numbers from Moody’s even exceed the forecasts of the government announced in the preliminary statement of the 2019 budget announcement on September 30, 2018.

Moody's expects higher oil production to boost the economy and developments in the non-oil sector to contribute to stronger GDP growth.

In its recent review, Moody’s noted that plans to diversify the Kingdom's economy away from oil are likely to contribute to the country's medium and long-term growth.

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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.