STC posts net profit of SR2.38 billion

STC posts net profit of SR2.38 billion
Updated 19 April 2016

STC posts net profit of SR2.38 billion

STC posts net profit of SR2.38 billion

DUBAI: Saudi Telecom Co. (STC) blamed rising costs for a 5.2 percent fall in first-quarter profit on Tuesday that extended an earnings slump and missed estimates.
The former monopoly, which competes domestically with Etihad Etisalat (Mobily) and Zain Saudi, made a net profit of SR2.38 billion ($634.84 million) in the three months to March 31.
This compares with SR2.50 billion in the prior-year period, a bourse statement said.
The cost of services rose 12.3 percent, although STC did not explain the cause of the increase.
Separately, general and administrative costs along with depreciation and amortization increased by SR332 million combined. Sales and marketing expenses fell by SR280 million.
Analysts polled by Reuters had on average forecast STC, which own stakes in operators in the Gulf, Turkey and Asia, would make a quarterly profit of SR2.5 billion.
STC had reported falling profit in five of the preceding six quarters, stalling a sudden improvement in its bottom line that had been sparked by the operator trimming its international ambitions and refocusing on its lucrative home market.
STC's quarterly revenue was SR12.76 billion, versus SR12.47 billion in the corresponding period of 2015, an increase of 2.3 percent.
STC provided no information on its foreign operations aside from stating that quarterly revenue from the non-domestic units for which STC has control — including mobile operators Kuwait and Bahrain — rose 3.7 percent year-on-year.
This outstripped a 2.9 percent increase in domestic revenue, which included a 17 percent rise in revenue from corporate customers.