Algeria Warns of Possible Gas Price Rise for Spain

Sonatrach CEO Toufik Hakkar said that Sonatrach could not at present substitute Russian gas Eric PIERMONT AFP
Sonatrach CEO Toufik Hakkar said that Sonatrach could not at present substitute Russian gas Eric PIERMONT AFP
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Algeria Warns of Possible Gas Price Rise for Spain

Sonatrach CEO Toufik Hakkar said that Sonatrach could not at present substitute Russian gas Eric PIERMONT AFP
Sonatrach CEO Toufik Hakkar said that Sonatrach could not at present substitute Russian gas Eric PIERMONT AFP

Algeria's state-owned energy giant Sonatrach warned Friday it could increase the price of its gas sales to Spain, against the backdrop of a diplomatic row with Madrid over the disputed Western Sahara.

"Since the start of the Ukraine crisis, gas and oil prices have skyrocketed. Algeria has decided to stick, for all its customers, to relatively fair contract prices," Sonatrach CEO Toufik Hakkar told the national news agency APS.

"But a 'recalculation' of prices for our Spanish customer is not ruled out," he said.

Algiers last month recalled its ambassador from Madrid in protest at a decision by Spain, which is heavily dependent on Algeria for its gas supplies, to back a Moroccan autonomy plan for Western Sahara.

Algeria has condemned the "abrupt about-turn" by Madrid, which had previously sought to maintain neutrality in the decades-old conflict over the territory disputed by Morocco and the Algiers-backed Polisario Front independence movement.

Questioned on Europe's hunt for alternative energy suppliers in place of Russia, heavily sanctioned over its invasion of Ukraine, Hakkar said that Sonatrach could not at present substitute Russian gas.

But "with the pace of our exploration, our capacity will double in four years, which could open promising prospects with our European clients," the Sonatrach chief said.



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.