Saudi Telecom Co. announces the interim consolidated financial results for the period ending on 30-06-2018 (Six Months)
| Element | Current quarter | Similar quarter for previous year | % Change current | Previous quarter | % Change previous |
|---|---|---|---|---|---|
| Net profit (loss) | 2,444 | 2,356 | 3.74 | 2,588 | -5.56 |
| Gross profit (loss) | 7,112 | 6,911 | 2.91 | 6,997 | 1.64 |
| Operational profit (loss) | 2,901 | 2,584 | 12.27 | 2,632 | 10.22 |
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element | Current period | Similar period for previous year | % Change |
|---|---|---|---|
| Net profit (loss) | 5,032 | 4,891 | 2.88 |
| Gross profit (loss) | 14,109 | 13,835 | 1.98 |
| Operational profit (loss) | 5,533 | 5,199 | 6.42 |
| Earning or loss per share, Riyals | 2.51 | 2.45 | - |
| All figures are in (Millions) Saudi Arabia, Riyals | |||
| Element | EXPLAINATION |
|---|---|
| Reasons of increase (decrease) for quarter compared with same quarter last year | The SR 88m increase in net profit for the 2nd quarter compared to the comparable quarter last year is attributed mainly to the following: 1) Consolidated revenue increased by SR 141m increase, while cost of services decreased by SR 60m, which resulted in the SR 201m increase in Gross profit. 2) The SR 116m decrease in Operating Expenses is mainly due to, the SR 160m decrease in the selling and marketing expenses which offset by an increase in depreciation and amortization by SR 51m . 3) A loss in an amount of SR (192m) for other income and expenses, net compared to a gain in an amount of SR 6m, mainly due to: - SR 11m increase in finance cost while the finance income decreased by SR 18m. - A gain in an amount of SR 17m in other income compared to a loss in an amount of SR (27m). - A gain in an amount of SR 15m in share of gain from investments in associates and joint ventures, compared to a gain of SR 93m. - A loss in an amount of SR (108m) in (Other gain, net) compared to a gain in an amount of SR 26m. 4) The SR 16m increase in Zakat and income tax provision. |
| Reasons of increase (decrease) for period compared with same period last year | The net profit for the 6 months period increased by SR 140m compared to the comparable period last year, mainly due to the following: 1) The SR 271m decrease in Cost of revenues, while consolidated revenue was maintained, which resulted in the SR 274m increase in Gross profit. 2) The SR 61m decrease in Operating Expenses is mainly due to, the SR 298m decrease in the Selling and marketing expenses which offset by an increase in General and administration expenses and depreciation and amortization by SR 109m and SR 128m (respectively). 3) A gain in an amount of SR 32m for other income and expenses, net compared to a gain of SR 160m, mainly due to: - The booking of SR 150m for early retirement program cost during the 2nd quarter compared to SR 300m. - SR 18m increase in finance cost while the finance income decreased by SR 51m. - A gain in an amount of SR 111m in other income compared to a gain in an amount of SR 47m. - A gain in an amount of SR 51m in share of gain from investments in associates and joint ventures, compared to a gain of SR 177m. - A loss in an amount of SR (67m) in (Other gain, net) compared to a gain in an amount of SR 81m. 4) The SR 37m increase in Zakat and income tax provision. |
| Reasons of increase (decrease) for quarter compared with previous quarter | The SR 144m decrease in net profit for the 2nd quarter compared to the previous quarter is attributed mainly to the following: 1) The increase in gross profit by SR 116m due to the increase in consolidated revenue by SR 796m which offset by an increase in cost of revenues by SR 681m. 2) The SR 153m decrease in Operating Expenses is mainly due to, the decrease in general and administration expenses and depreciation and amortization by SR 116m and SR 239m (respectively) which offset by an increase in selling and marketing expenses by SR 203m. 3) A loss in an amount of SR (192m) for other income and expenses, net compared to a gain of SR 224m is mainly due to: -The booking of SR 150m for early retirement program cost during the 2nd quarter. -SR 2m increase in finance cost while the finance income decreased by SR 16m. -A gain in an amount of SR 17m in other income compared to a gain in an amount of SR 94m. -A gain in an amount of SR 15m in share of gain from investments in associates and joint ventures, compared to a gain of SR 36m. - A loss in an amount of SR (108m) in (Other gain, net) compared to a gain in an amount of SR 41m. |
| Reclassifications in quarterly financial results | The interim condensed consolidated financial statements for the comparative period have been represented, reclassified and categorized in accordance with the International Financial Reporting Standards and the new Standards (IFRS 9: Financial Instruments and IFRS 15 Revenue from Contracts with Customers) applied in the presentation, classification and classification of the interim condensed consolidated financial statements for the current period which have been prepared in accordance with the International Financial Reporting Standards adopted in Kingdom of Saudi Arabia and Other accredited by the Saudi Organization for Certified Public Accountants. |
| Other notes | Revenue from services for the 6 months period amounted to SR 25,568m compared to SR 25,565m for the corresponding period last year, an increase of 0.01 %, and for the 2nd quarter revenue from services reached SR 13,182m compared to SR 13,041m for the corresponding quarter last year an increase of 1.1%. Earnings before interest, taxes, zakat, depreciation and amortization (EBITDA) for the 6 months period amounted to SR 9,318m compared to SR 8,856m for the corresponding period last year, an increase of 5.2% and for the 2nd quarter amounted to SR 4,674 compared to SR 4,305 for the corresponding quarter last year, an increase of 8.6%. Total shareholder equity (excluding non-controlling interest) as 30th of June 2018, reached SR 63,803m compared to SR 61,777m to the corresponding period last year an increase of 3.3%. Total comprehensive income for the 6 months period of 2018 reached SR 4,889m compared to SR 4,843m for the corresponding period last year, an increase of 0.9% and for the 2nd quarter comprehensive income reached SR 2,349m compared to SR 2,330m for the corresponding quarter last year, with an increase of 0.8% and compared to SR 2,540m with previous quarter this year with a decrease of 7.5%. The external auditors have reviewed the interim consolidated financial statement and their conclusion is unmodified. Commenting on the financial results, Eng. Nasser Bin Sulaiman Al Nasser, Chief Executive Officer of Saudi Telecom Group stated: The results of the 1st half of 2018 was good compared to the corresponding period last year, as the company maintained the revenue level which was driven by an increase in data revenue by 6.7%. The company continues the comprehensive program to improve the operational efficiency and to work on costs optimization initiatives, that have led to an increase in the net profit by 3.7% in the 2nd quarter of 2018 compared to the same quarter last year and by 2.9% for the 6 months of 2018 compared to the same period last year. As part of the company strategy (DARE) that aims to grow and expand in non-traditional fields in the ICT sector, Eng. Al Nasser mentioned, that the company aims to expand its investment through focusing on the value add of the technical and Fin-Tech solutions and content, which will help to achieve the targeted growth that the company seeks in the near future. In addition, the new Data Center in Riyadh, which represents the infrastructure of digital transformation, has been launched in line with the National Transformation Program 2020 and Vision 2030. It will have a positive role to play in supporting and enabling the digital services for both public and private sectors in advanced technologies of cloud computing, cyber security, data analysis and smart cities. Al Nasser affirmed that by launching the new Data Center, STC would be the largest provider of infrastructure in the Middle East for Cloud Computing services with 12 new centers to be added over the next three years. Eng. Al Nasser also said, that as the company continues the technological advancement, its vision for the future and providing digital solutions that enrich the customer experience, which corresponds to the tremendous development in the telecommunications sector, have both led us to achieve, 1) the first place in the Kingdom as the fastest internet provider on the 3G, 4G and Fiber networks, according to (Mekias - Standard), 2) the successful launch of the first live 5G network after completion of the tests stage, for the first time in the Middle East and North Africa, and 3) being placed among the top 20 in the world within 100 international companies in the field of Communications and Information Technology, according to (Global). He also added, as the main provider of digital services and as part of the Vision 2030 initiatives, the company continues to deploy Fiber Optic Broadband services in the urban areas of the Kingdom with the support from the Ministry of Communications and Information Technology. The total number of Fiber Optic subscribers have increased in 2nd quarter of 2018 by 8.5% compared to the same quarter last year. |
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