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Saudi Arabia Receives Largest Share of China's BRI Investments

Saudi Arabia is seeking to increase investments and trade exchange worldwide. (Asharq Al-Awsat)
Saudi Arabia is seeking to increase investments and trade exchange worldwide. (Asharq Al-Awsat)
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Saudi Arabia Receives Largest Share of China's BRI Investments

Saudi Arabia is seeking to increase investments and trade exchange worldwide. (Asharq Al-Awsat)
Saudi Arabia is seeking to increase investments and trade exchange worldwide. (Asharq Al-Awsat)

Saudi Arabia is the largest recipient of Chinese investments within the Belt and Road Initiative (BRI) during the first half of 2022, according to a recent report.

China's Belt and Road Initiative aims to improve interconnection and cooperation across continents and move to jointly establish the Silk Road Economic Belt and the 21st century Maritime Silk Road.

The Chinese government has focused on the international community, especially the countries along the initiative's paths, to further its initiative.

A report by the Shanghai-based Green Finance and Development Center indicated that gas commitments were higher than in the past two years and accounted for 56 percent of China's energy contributions in 2021.

Saudi Arabia was the primary recipient of gas investments by about $4.6 billion, followed by Iraq.

Saudi Arabia was the primary recipient of Chinese investments, while various countries saw no Chinese engagement in H1 2022, including Russia, Sri Lanka, and Egypt.

According to the report, BRI finance and investments are steady at low levels in the first half of 2022 at $28.4 billion, compared to $29.6 billion in the first half of 2021.

Meanwhile, the Kingdom's merchandise exports reached $38.4 billion in May, compared to $21 billion during the same month last year, an 83.4 percent increase of $17.3 billion.

The General Authority for Statistics (GASTAT) revealed that oil exports increased in May to $30.9 billion, compared to $15.2 billion during the same month in 2021, a 105.5 percent rise.

The report showed the trade balance of exports and imports rose about threefold in May to $24 billion, compared to the same month last year, which reached $9 billion.

It indicated that last May's non-oil exports (including re-exports) amounted to $7.4 billion, compared to $5.8 billion in the same month the previous year, a $1.6 billion increase.

Data showed that the value of the Kingdom's merchandise imports during May amounted to $14.4 billion, compared to $11.7 billion in the same month of 2021, a 21.8 percent hike.

The report revealed that the Kingdom's exports to China last May reached $5.1 billion, 13.3 percent of the total exports, making it the leading destination for Saudi Arabia, followed by India and Japan, amounting to $3.9 billion.

GASTAT is the only official statistical reference for statistical data and information in Saudi Arabia.

It executes all the statistical work and technical oversight of the statistical sector, designs and implements field surveys, conducts statistical studies and research, and analyzes data and information.

The authority also documents and archives the information and statistical data covering all aspects of Saudi Arabia's life from multiple sources.

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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.