JEDDAH, 20 December 2002 — STC shareholders will be paid profits ranging between 30 percent and 40 percent of the net corporate profits for the year 2003.
Saudi Telecom Company Chairman Khaled Al-Molhem made this tempting promise in a meeting with businessmen and investors at the Jeddah Chamber of Commerce and Industry on Wednesday.
Molhem did not say the expected size of the profit the company would make in the period, though. However, he hoped that it would be “excellent” compared to several international telecom companies operating in other parts of the world.
The STC chairman told prospective investors that the climate in the Saudi telecommunications market is immensely encouraging, especially because the youth constituted the largest section of STC customers.
Al-Molhem denied that popular response to the STC flotation on the opening day was lukewarm. Initial reports showed that a large number of people, especially women, had contacted banks across the country for subscription. This reflected the trust Saudi women reposed in the company, he added. He expressed hope that the flotation would be oversubscribed.
Al-Molhem said the company stands to benefit vastly when the Saudi telecom sector is opened up for private sector competition because the new players will have to depend on STC for the infrastructure. Moreover, STC will also achieve high levels of competitiveness in the coming years both domestically and regionally, as its current expansion projects will be completed enabling it to offer better quality service, he added.
The corporate revenue registered a steady growth averaging at 15 percent in the past four years rising from SR14.44 billion in 1999 to SR23.34 billion. Improved efficiency has resulted in a 10 percent drop in operational costs and increase of 47 percent in operational income during the period.
The company caters for more than three million mobile phone connections and 3.3 million landlines. STC began selling 30 percent of its 300 million shares on Dec.17 in the largest sell-off in the Kingdom since 1984.
AFP adds: STC posted net profits of $762.4million in the first nine months of 2002, down 19.5 percent on net profits of $911.5 million made in the corresponding period last year. The fall was attributed to increased expenditure on the company’s restructuring programs.
