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Saudi PIF Establishes Regional Voluntary Carbon Market Company

The partnership works on support businesses and industry in the region as they play their part in the global transition to net zero - PIF
The partnership works on support businesses and industry in the region as they play their part in the global transition to net zero - PIF
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Saudi PIF Establishes Regional Voluntary Carbon Market Company

The partnership works on support businesses and industry in the region as they play their part in the global transition to net zero - PIF
The partnership works on support businesses and industry in the region as they play their part in the global transition to net zero - PIF

The Public Investment Fund (PIF) announced the establishment of the Regional Voluntary Carbon Market Company, where PIF holds an 80% stake and Saudi Tadawul Group Holding Company holds a 20% stake in the company.

The company will offer guidance and resourcing to support businesses and industry in the region as they play their part in the global transition to net zero, ensuring that carbon credit purchases go above and beyond meaningful emission reductions in value chains.

PIF and Saudi Tadawul Group announced earlier in September 2021 the Voluntary Carbon Market (VCM) Initiative, as the Saudi Crown Prince Mohammed bin Salman bin Abdulaziz, Prime Minister, Chairman of the Council of Economic and Development Affairs, and Chairman of the Board of Directors of PIF, hailed Saudi Arabia’s leading role in contributing to the reduction of the impact of climate change.

Headquartered in Riyadh, the company’s announcement will help facilitate the efforts of the world’s largest-ever carbon credit auction on the 25th of October at the 6th Edition of the Future Investment Initiative (FII).

The auction will involve a total of one million tons of carbon credits and will offer high-quality credits including CORSIA compliant, Verra registered certificates.

Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF said: “We are delighted to announce the establishment of the Regional Voluntary Carbon Market Company, which coincides with the auction’s announcement – a major milestone for the Middle East and North Africa region."

"We are passionate about the potential for voluntary carbon markets to deliver additional carbon reduction benefits throughout the region, thereby ensuring the MENA region is at the forefront of climate action and that Saudi Arabia is a leading force in solving the climate challenge," he added.

The company will play an important role in PIF’s wider efforts to drive the investment and innovation required to address the impact of climate change and support Saudi Arabia’s efforts to achieve net zero by 2060.”

For his part, Eng. Khalid A. Al-Hussan, CEO of Saudi Tadawul Group said: “The Saudi Tadawul Group has an important role to play in championing Saudi Arabia’s efforts towards a sustainable future. We continuously work towards encouraging the adoption of ESG disclosures in the Saudi capital market, to advocate for a better, more transparent future. We are delighted to be an integral part, strategically and operationally, in the Regional Voluntary Carbon Market Company. We believe it will be instrumental in supporting Vision 2030 and in further realizing the Group’s vision of being a gateway to the MENA region for global investors."

Also, Riham ElGizy, Director of VCM Initiative said: “The inaugural auction represents the first step towards becoming a leading presence in the global voluntary carbon market ecosystem. With an expected one million tons of carbon credits available to trade, we predict that our auction will be the largest carbon credit auction to date. ”

The company’s establishment is a continuation of PIF initiatives to support Saudi Arabia’s green agenda and follows previous announcements by the Fund, including the completion of its $3 billion inaugural green bond, and the various renewable projects PIF is spearheading as part of its commitment to develop 70% of Saudi Arabia’s renewable energy capacity, in line with Saudi Vision 2030.

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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.