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GASTAT: Real Estate Prices Increase at Record Rate

GASTAT: Real Estate Prices Increase at Record Rate
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GASTAT: Real Estate Prices Increase at Record Rate

GASTAT: Real Estate Prices Increase at Record Rate

New indicators have shown the ability of Saudi Arabia’s non-oil sectors to witness growth.

The latest indicator was issued by the General Authority for Statistics (GASTAT) on Thursday, showing a 0.4 percent increase of the Real Estate Price Index during Q2 of 2019.

The new data goes in tandem with other indices showing the rise in sales of cement in the local market, which recorded an increase of 20 percent during last month compared to the same month of 2018. This shows that the construction sector in the country is recovering along with the rise in prices of real estate.

Usually the rise in the price index is an indicator that global consultant firms use to figure out the trade volume and growth of any economy in the world. This comes as the Saudi economy enjoys high growth rates this year, exceeding local and global estimates.

In this regard, GASTAT issued Thursday the Real Estate Price Index for Q2 2019 in which it announced a rise of 0.4 percent compared to the previous quarter. Real Estate Price Index in the Kingdom reached 4.8 in Q2 compared to 1,8 percent in Q1.

According to the authority, this rise resulted from the changes in the constituting sectors of the index.

During Q2 of 2019 compared to Q1, the housing sector witnessed a rise in residential lands up to 0.2 percent and in apartments up to 0.5 percent. However, buildings dropped 0.3 percent, villas 2.7 percent and houses 0.3 percent.

As for the commercial sector, plots rose 0.8 percent compared to Q1, and galleries rose 2.1 percent while shops declined 1.9 percent.

Global rating agencies forecast growth in the Saudi economy in which Fitch and Moody’s affirmed the Saudi credit rating at A+ and A1 with a stable outlook. This proves the global confidence in the Saudi economy and the efficiency of economic reforms taken by the government.

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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.