Saudi Telecom Company (STC) announced the company's preliminary financial results for six months ending June 20, 2013. Net profit for the 1st half of 2013 amounted to SR2.98 billion compared to SR4.93 billion for the corresponding period last year, a decrease of 40 percent, and for the 2nd quarter net profit reached SR1.43 billion compared to SR2.41 billion for the corresponding period last year, a decrease of 41 percent, and a decrease of 8 percent compared with the immediately prior quarter. The decrease in net profit for the 1st half of 2013 compared to the same period last year (despite the 4 percent increase in gross profit during the 1st half of 2013), Is attributed to the booking of one-time, non-recurring and non-cash charge of SR1.10 billion resulting from fair valuation of its investments in Asia (Aircel and Axis) and unrealized FX losses of SR601m due to the sharp depreciation of Turkish lira, Indian rupee and Indonesian rupiah (despite the 4 percent increase in gross profit for the period due to the increase in services revenue). Impacting the results was also the disposal of fixed assets with a net book value of SR277 million during the 1st quarter. These financial results for the period has lead the Board of Directors to approve the distribution of a total of SR1 billion in cash dividend for Q2 2013, representing SR0.5 per share. Commenting on the results, STC Group chairman and managing director, Engineer Abdulaziz Al-Sugair, said “the financial results for the 1st half of 2013 were overall good, reflecting STC group capability of delivering high single digit top line growth. Revenues from domestic operations during the 1st half of 2013 increased 5 percent as a result to the growth in business sector and Broadband (fixed & wireless) services revenues. Also, the 1st half of 2013 experienced revenue growth of 22 percent in the controlled subsidiaries compared to same period last year which lead to the overall increase of 4 percent in STC group consolidated revenue for the 1st half of 2013 compared with the same period last year. During the 2nd quarter, we have witnessed growing revenues from domestic operations mainly from Aljawal BU services and Enterprise BU services increasing 7 percent and 8 percent respectively compared to same period last year. STC sees this growth sustainable short to mid-term specifically in Broadband (fixed & mobile and Business sector services. STC will continue to provide more focus on these growing sectors domestically and make all resources available in order to capture the largest share of this growth in the future.” Alsugair also said “the overall results for the Group were adversely impacted by the international operations.” – SG
