Saudi Telecom Q4 profit plunges 79pc
Jeddah, January 21, 2013
Saudi Telecom Company (STC), the Gulf's No.1 telecom operator, reported a 79-per cent fall in fourth-quarter profit on Monday, missing market expectations, after it took one-time charges related to affiliates in South Africa and India.
STC, which is majority government-owned, made a net profit of SR468 million ($124.8 million) in the three months to December 31, down from a SR2.28 billion in the prior-year period.
Analysts polled by Reuters on average forecast STC - the largest Gulf telecom operator by market value, with operations across the Muslim world from Indonesia to Turkey - would make a quarterly profit of SR2.4 billion.
The former monopoly attributed the fall in net profit to charges on adjusting the fair value on its investment in South Africa's Cell C and Aircel in India - leading to a one-off non-cash charge of SR641 million - and changes in Indian telecom regulations which resulted in a charge of SR544 million, related to Aircel.
Quarterly operating income fell 32.5 per cent to SR1.9 billion.
Revenue from services for the fourth quarter fell 1.7 per cent to SR15 billion compared with SR15.2 billion for the corresponding quarter last year.
Full-year profit for 2012 was SR7.4 billions, down from SR7.7 billion in 2011.
Soaring demand for broadband has lifted earnings in recent quarters, with STC offering bundle packages to woo customers back from rival operators Etihad Etisalat (Mobily) - an affiliate of UAE operator Etisalat, and Zain Saudi - part-owned by Kuwaiti group Zain.
STC said in a separate statement that it would issue a 0.5 riyal per share dividend for the fourth quarter. Shares in STC closed at SR44 on Sunday.-Reuters