Saudi Telecom Co. (STC) on Sunday posted its first fall in quarterly profit since June 2007, missing forecasts, on costs related to its expansion in Asia and the Gulf Arab region. STC said net profit was SR3.01 billion ($803.7 million) in the three months to Sept. 30, compared with SR3.14 billion in the year-earlier period, according to a statement on the bourse website. The results missed the forecasts of four analysts, ranging from SR3.35 billion to SR4.01 billion, according to a Reuters survey last month. The decline came as the firm helped expand the Asian and Kuwaiti networks of companies it has invested in. STC bought a 26 percent stake in VIVA, Kuwait's third telecom operator, in November last year. Through its 25 percent stake in Malaysia's Maxis, the Saudi firm is also involved in network expansion in India and Indonesia. STC has come under pressure to improve profitability with stiffening competition at home from rivals led by Kuwait's Zain and Emirates Telecommunications Corp. It has also been expanding abroad, snapping up assets worth billions of dollars. Chief Executive Saud Al-Duweish told Al-Arabiya television that most of the Saudi company's foreign profits in the quarter came from Oger Telecom, the Dubai-based firm it bought a 35-percent stake in earlier this year for $2.56 billion. Oger operates in Turkey, South Africa, Saudi Arabia, Lebanon and Jordan. STC is also among bidders for a 25 percent stake in Oman Telecommunication Co OTL.OM, which the government of Oman is selling. Income from operations rose 58 percent in the third quarter to SR13.54 billion, bolstered by the acquisitions it has made over the past 15 months. Operating profit rose 20.5 percent to SR4.2 billion. STC made a net profit of SR9.88 billion in the nine months ended Sept. 30, compared with SR8.96 billion a year earlier. The telecom firm said it would issue SR2 billion in dividends in the third quarter. The company's shares are down 28.96 percent this year to Saturday's close, outperforming the main index .TASI, which has lost 49.05 percent.
