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Saudi Arabia Underlines Support to IMF Efforts to Alleviate Global Food Crisis

Saudi Finance Minister Mohammed Al-Jadaan meets with IMF Managing Director Kristalina Georgieva. (Asharq Al-Awsat)
Saudi Finance Minister Mohammed Al-Jadaan meets with IMF Managing Director Kristalina Georgieva. (Asharq Al-Awsat)
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Saudi Arabia Underlines Support to IMF Efforts to Alleviate Global Food Crisis

Saudi Finance Minister Mohammed Al-Jadaan meets with IMF Managing Director Kristalina Georgieva. (Asharq Al-Awsat)
Saudi Finance Minister Mohammed Al-Jadaan meets with IMF Managing Director Kristalina Georgieva. (Asharq Al-Awsat)

Saudi Minister of Finance Mohammed Al-Jadaan underlined his country’s support to the efforts of the International Monetary Fund (IMF) to mitigate the impact of the global food crisis.

During a meeting with IMF Managing Director Kristalina Georgieva, Al-Jadaan discussed areas of bilateral cooperation, including capacity development and the establishment of a regional office in Riyadh.

According to Georgieva, talks reviewed the strong economic performance of Saudi Arabia and its basic support for the region, in addition to joint collaboration to address global challenges such as energy and food security.

The Ministry of Finance is scheduled to hold a press conference on Monday to sign a memorandum of understanding on the establishment of a regional office for the IMF in Saudi Arabia - a step that reflects Riyadh’s position as one of the largest economies in the region and the G20.

Meanwhile, the Saudi non-oil economy registered a growth of 5.4% during the second quarter of 2022, amid expectations of record growth rates throughout the year.

The Ministry of Finance disclosed estimates of its budgets until 2025, showing positive trends and expectations of sustainable financial surpluses during the medium term.

The preliminary statement of the state’s general budget for the fiscal year 2023 expected total expenditures to reach about 1.11 billion riyals ($296 billion), and total revenues about 1.12 billion riyals ($298 billion), to achieve surpluses of around 9 billion riyals, representing 0.2 percent of GDP.

Saudi Arabia is planning to reach an estimated billion increase in the budget for the current year 2022, exceeding 90 billion riyals ($24 billion), thus recording the first actual budget surplus in nearly a decade.

The Ministry of Finance justified its positive estimates for the coming years by citing continuous work to raise the efficiency and effectiveness of spending and financial control and the implementation of economic and financial reforms within Vision 2030, as well as promoting the growth of local investment by building partnerships with the private sector.

Separately, SAMA’s monthly bulletin said that loans granted by banks to government institutions and the private sector in the Kingdom increased by 15% to reach 2.3 billion riyals ($629 million) at the end of August, compared to about 2 billion riyals ($546.4 million) during the same period in 2021.

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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.