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Saudi Aramco Raises Asia Official Selling Price

View of the production facility at Saudi Aramco's Shaybah oilfield (File Photo: Reuters)
View of the production facility at Saudi Aramco's Shaybah oilfield (File Photo: Reuters)
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Saudi Aramco Raises Asia Official Selling Price

View of the production facility at Saudi Aramco's Shaybah oilfield (File Photo: Reuters)
View of the production facility at Saudi Aramco's Shaybah oilfield (File Photo: Reuters)

Saudi Aramco raised its May official selling price (OSP) to Asia for its flagship Arab Light crude to $9.35 a barrel above Oman/Dubai crude, its highest premium ever.

Oil jumped more than 3 percent on Monday to $108 a barrel as the release of strategic reserves by consuming nations failed to address supply concerns arising from Russia's invasion of Ukraine and the failure of an Iran nuclear deal.

The invasion in February severely heightened supply concerns that were already supporting prices.

Sanctions against Russia and shunning buyers of Russian oil have already reduced production and raised fears of even more significant losses.

"Will liberating barrels from the strategic reserves fill the shortage caused by sanctions and buyer alienation from Russian oil? In short, no," said Stephen Brennock of BVM oil brokerage.

Brent crude rose $3.19, or 3.1 percent, to $107.58 a barrel. US West, Texas Intermediate crude rose $3.46, or 3.5 percent, to $102.73. Both contracts were down more than $1 earlier in the session.

Crude oil fell about 13 percent last week after US President Joe Biden announced a record release of US oil reserves, as members of the International Energy Agency pledged more wiretapping of the reserves.

The price of crude oil reached $139 last month, the highest level since 2008.

Oil also got a boost from stalled talks in Vienna to revive the Iran nuclear deal, which would allow sanctions on Iranian oil to be lifted.

On Monday, Iran blamed the United States for the ceasefire.

The downward pressure came from the armistice in Yemen, which may mitigate supply threats in the Middle East.

For the first time in the seven-year conflict, the United Nations-brokered a two-month truce between a Saudi-led coalition and the Houthi movement. The Houthis attacked Saudi oil facilities during the fighting.

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Business

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.