Saudi Telecom Company (STC) reported a 16.8 percent rise in net profit for Q2 2019, as the company’s gross profit surged. The telecom giant also announced a dividend of 1 riyal per share for the quarter.
STC’s Q2 2019 net profit after zakat and tax amounted to 2.85 billion riyals ($759.82 million), compared to 2.44 billion riyals in the same period last year.
The company’s sales rose 3.98 percent to 13.6 billion riyals in Q2 2019, up from 13.08 billion riyals in Q2 2018.
“It’s a good set of numbers, beating our expectation by 3 percent in revenue and 6 percent in net profit,” Pritish Devassy, head of equity research at Al Rajhi Capital told Zawya by email.
STC told the Saudi exchange that one of the reasons behind the year-on-year increase in net profit was the surge in gross profit.
“Consolidated revenue increased by 524 million riyals, while cost of revenue declined by 516 million riyals, which led to the 1,040 million riyals increase in gross profit,” STC told Tadawul.
The company announced a 10 percent dividend, implying a 1 riyal per share dividend for Q2 2019, in line with Al Rajhi Capital’s expectations.
Etihad Etisalat (Mobily) announced a net profit after zakat and tax of 37.8 million riyals in Q2 2019, compared to a loss of 78.6 million riyals in Q2 2018, while Mobile Telecommunications Company Saudi Arabia (Zain) reported a net profit after zakat and tax of 130 million riyals for Q2 2019, compared to a loss of 38 million riyals for Q2 2018.
“For all the three telecoms, revenue broadly came better than expectations despite being usually a moderately sluggish Ramadan period. Costs seem to have improved as well,” Devassy said.
STC’s shares were trading 0.36 percent higher at 110 riyals by 14:02 GST on Tuesday and have added 19.83 percent so far since the start of 2019.
Reporting by Gerard Aoun; Editing by Seban Scaria)
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