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SABIC Profits Exceed 16%

SABIC press conference in Riyadh
SABIC press conference in Riyadh
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SABIC Profits Exceed 16%

SABIC press conference in Riyadh
SABIC press conference in Riyadh

Saudi Basic Industries Corp. (SABIC) announced Sunday that its full-year profit rose about 16.87 percent to $5.7 billion.

Speaking at the press conference to announce the company’s financial results of 2018, Chief Executive Yousef al-Benyan indicated that SABIC expects to face challenges this year due to uncertainty over the impact of a global trade war on the United States and China.

“We’ve seen stabilization for some of the prices, still there are some challenges ahead of us,” Benyan stated.

Benyan also announced that SABIC’s biggest shareholder, the Public Investment Fund (PIF), is in talks to sell its majority stake to Aramco, describing the move as “positive”. Any further details are a matter for PIF and Aramco, he added.

“We are part of the global economic system, we are always affected by challenges but we are able to adapt to these challenges in the best way.”

The CEO also indicated that SABIC is still working on achieving its 2025 strategy visions through various alliances with international companies. He added the company will determine later if it needs to increase its 24.99 percent stake in Switzerland’s Clariant after the two companies decided to merge their high-performance materials businesses.

He said SABIC will continue to raise its presence in Africa, as it is seen as a very promising market.

He pointed out that a decline in petrochemical prices had significantly impacted the profitability in the fourth quarter compared to profits in the previous period of the year.

Benyan noted that SABIC's year-end pricing challenge did not discourage its focus on continued business transformation and operational excellence while achieving long-term strategic growth objectives.

Total revenue reached $45 billion, an increase of 12.9 percent from the previous year. Earnings per share reached $1.9, an increase of 17 percent over last year. Net profit for the fourth quarter was $ 850 million, down 12.43 percent from the same period last year and a decrease of 46.88 percent compared to the third quarter of 2018.

The company said that the results reflected an improvement in the average selling price of SABIC products, as well as the success of the corporate-led transformation initiatives to enhance their competitiveness globally.

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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.