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Al Rajhi Capital reinstates ‘Overweight’ for STC

Al Rajhi Capital reinstates ‘Overweight’ for STC
STC
7010
-4.35% 39.60 -1.80
In a recent report, Al-Rajhi Capital has stated that Saudi Telecom Co.’s (STC) Q4 net profit came at SAR 2.44 billion compared to its expectation of SAR 2.9 billion.
Even after adjusting for the one-off expenses this quarter, the net income came 5% below expectations, the research firm said.
However the topline at SAR 11.8 billion was in-line with Al-Rajhi’s expectations.
The cost efficiencies seen in the last quarter which helped STC post stellar 46% EBITDA margin (from previously~40%) was not seen this quarter. Thereby, the company posted relatively weaker clean EBITDA margin of 39% for Q4, according to the report.
The company was able to maintain its dividends for Q4 at SAR 1 per share, in line with the report issuer’s expectations.
Overall for 2014, the topline grew by 1.1% and bottom-line grew by 11.2%.
Al-Rajhi remained ‘Overweight’ on the stock, with a target price of SAR 80 per share.
Photo Credit: Arabianeye-Reuters