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Saudi Companies Witness Remarkable Growth in Q3 2018

Saudi Companies Witness Remarkable Growth in Q3 2018
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Saudi Companies Witness Remarkable Growth in Q3 2018

Saudi Companies Witness Remarkable Growth in Q3 2018

The Saudi Ministry of Commerce and Investment revealed a steady increase in the number of companies and establishments during the third quarter of 2018, compared to the same period in 2017 and 2016.

This coincided with MCI endeavor and efforts, in cooperation with the concerned government authorities, to ease the starting up of businesses and facilitate the relevant procedures.

The number of current establishments during the third quarter of 2018 grew by more than 35%. The number of firms reached 945,600 compared to 824,700 during the same period in 2017, while in 2016 the number was 701,300 for the same period.

The number of listed companies increased by 23% during the third quarter of 2018, to reach 148,000 compared to 133,600 for the same period in 2017, while the number was 121,000 during 2016.

The number of limited liability companies increased by 25% during the third quarter of 2018 to reach 108,400 companies, compared to 96,700 companies during the same period of 2017, while in 2016 the number was around 87,000.

The rate of Closed Shareholding Companies increased by 15% during the third quarter of 2018 to reach 1,400 companies, compared to 1,330 companies during the same period of 2017, while in 2016 the number was 1,222.

The ratio of issuing the Commercial Registrations for ten economic sectors increased between 8.2 to 16.9% during the third quarter of 2018, compared to the same quarter of 2017.

These sectors included wholesale and retail trading, commercial services, construction and building, contracting, industry, transportation, storage and refrigeration, social and personal services, agriculture, fishing and forestry, electricity generation and water, mining, petrol, business and financial services, and other miscellaneous services.

The General Authority for Statistics recently issued results of the Index of Industrial Production during the second quarter of 2018.

The results indicated an increase of 4.17% in the industrial production index during the second quarter of 2018, compared to the first quarter of the same year. The index registered 137.87 points during the second quarter of 2018.

As for the industrial production index activities, the mining and quarrying indicator rose by 1.89%, while the manufacturing production increased by 5.07%. The production of the electricity and gas supply registered an increase with 83.46% when compared to the first quarter of 2018.

The results also showed an increase of 5.84% in all industrial activities compared to the second quarter of 2017. The growth in mining and quarrying production reached 1.95%, while the manufacturing production growth registered 16.44%. However, the production of electricity and gas supply decreased by 0.30%.

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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.