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Saudi Railway Forum Unveils First Package of Investment Opportunities

The Railway Industrial Opportunities Forum kicked off in Saudi Arabia on Thursday. (Asharq Al-Awsat)
The Railway Industrial Opportunities Forum kicked off in Saudi Arabia on Thursday. (Asharq Al-Awsat)
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Saudi Railway Forum Unveils First Package of Investment Opportunities

The Railway Industrial Opportunities Forum kicked off in Saudi Arabia on Thursday. (Asharq Al-Awsat)
The Railway Industrial Opportunities Forum kicked off in Saudi Arabia on Thursday. (Asharq Al-Awsat)

Saudi Arabia launched on Thursday the first batch of investment packages in the railway sector, with a value of one billion riyals ($266 million).

Minister of Transport and Logistics Saleh Bin Nasser Al-Jasser inaugurated the Railway Industrial Opportunities Forum, an event held under the auspices of the National Industrial Development and Logistics Program.

In a speech on the occasion, the minister said that the forum will see the launch of the first package of economic and industrial opportunities, with investments exceeding one billion riyals (266.6 million dollars), which will provide a qualitative advantage and an added value to the transport sector and to other vital economic segments in the Kingdom.

He said the forum aims to consolidate partnerships between the public and private sectors and develop the railway infrastructure, in line with the railway sector’s plans, which seek to open the market to new operators, and increase the participation of the private sector in freight operations, passenger trips and assets.

The event comes a year after the restructuring of the railway sector in the Kingdom under the Saudi Railway Company (SAR), the minister noted.

He unveiled plans to increase its railways by over 8,000 kilometers, to build local and regional connection, double transport capacity, and adopt modern technology to reduce the environmental impact of transport.

For his part, the CEO of SAR, Dr. Bashar Al-Malik, explained that the industrial opportunities offered in the forum came to meet the local need, stressing the company’s determination to overcome all challenges in partnership with all government sectors and take the necessary decisions towards the localization of the railway industry.

Al-Malik urged the private sector to invest these opportunities as basic partners in a vital and promising sector, stressing that the localization of the railway industry was no longer an option but rather “a strategic goal that we strive to achieve with determination.”

In this regard, he emphasized that the SAR was striving to encourage international manufacturers to build partnerships with a number of local factories for the purpose of knowledge sharing and technology transfer. This has contributed to increasing the proportion of local content by more than 41 percent of the SAR’s total revenues, with a value exceeding 1.5 billion riyals.

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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.