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Saudi Arabia Begins Localizing Consultancy Sector

Saudi Arabia has kicked off on Thursday the process of localizing the consultancy sector and professions across the Kingdom. (Asharq Al-Awsat)
Saudi Arabia has kicked off on Thursday the process of localizing the consultancy sector and professions across the Kingdom. (Asharq Al-Awsat)
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Saudi Arabia Begins Localizing Consultancy Sector

Saudi Arabia has kicked off on Thursday the process of localizing the consultancy sector and professions across the Kingdom. (Asharq Al-Awsat)
Saudi Arabia has kicked off on Thursday the process of localizing the consultancy sector and professions across the Kingdom. (Asharq Al-Awsat)

Saudi Arabia has kicked off on Thursday the process of localizing the consultancy sector and professions across the Kingdom.

The Ministry of Human Resources and Social Development (MHRSD) announced the start of the first phase of the process.

The Ministry aimed to provide a stimulating and productive work environment for Saudi men and women, increase their participation in the labor market, and strengthen their contribution to the economy.

The first phase of the localization included consultants and specialists who practice consulting work in the sector by 30 percent, which is expected to provide job opportunities for male and female citizens.

Localizing the consultancy sector and professions is part of the cooperation between the Ministry with the supervising bodies.

It included the Ministry of Finance, the Local Content and Government Procurement Authority, the Expenditure and Project Efficiency Authority, and the Human Resources Development Fund (HADAF).

The cooperation aims to boost the presence of the human cadres in the sector, increase the percentage of Saudis in the industry, develop the local content in this strategic sector, and organize the labor market.

The Local Content and Government Procurement Authority will follow up on the commitment to include localization requirements in consulting contracts.

Furthermore, the MHRSD declared Thursday that the first and second phases of the “Updated Nitaqat” Saudization program have been instrumental in raising the number of Saudi citizens working in the private sector.

The number reached more than 2.1 million by the end of 2022, bringing the total number of Saudis who joined the labor market that year alone to over 277,000, or 80 percent of the program's targets.

After the second phase in January 2023, the Ministry noted that the program aimed to achieve the strategic goals of employing about 35,000 Saudis in the market during the first quarter of this year, raising the total number of Saudis working in the private sector to more than 2.23 million.

The program has contributed to the rest of the Ministry's programs and initiatives to reduce the unemployment rate to historic levels, reaching 8 percent.

The Ministry launched mid-2021 the Updated Nitaqat program and gave all private sector establishments sufficient time to respond to changes and improve their human resource plans to comply with the program's requirements.

It also supported private sector establishments with incentives and facilities to employ Saudis, namely subsidizing wages, in cooperation with HADAF and activating an instant account for using Saudis in all establishments.

The program's updated version focuses on reducing obstacles by merging similar economic activities with close localization rates into unified groups.

It also establishes a clear plan for the required localization rates from the private sector over the next three years, which would gradually apply the necessary rates, granting adequate time to achieve those goals.

The Ministry developed the program by aligning it with the needs and nature of the various sectors through a series of workshops with the government agencies supervising these sectors and in cooperation with the private sector.

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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.