#Saudi Telecom’s Q2 profit up 3.6% on reduced expenses

Saudi Telecom’s Q2 profit up 3.6% on reduced expenses

Saudi Telecom Company, the biggest telecoms operator in the kingdom by market value, reported a 3.6 per cent year-on-year increase in second-quarter net profit, underpinned by a drop in operating expenses in three months to June 30.

Net profit increased to 2.8 billion Saudi riyals ($746.5 million) in the April-June period, the company said in a statement to Saudi Arabia's Tadawul stock exchange, where its shares trade.

Revenue for the quarter rose 6.6 per cent on an annual basis to 15.9bn riyals, almost 980m riyals more than the same period last year.

STC is majority owned by the kingdom's sovereign wealth fund Public Investment Fund, which holds a 70 per cent stake in the company. The Riyadh-based telecoms operator has more than 13,500 employees in Saudi Arabia and more than 19,000 across the group.

The company’s operating profit rose more than 6 per cent annually to 3.3bn riyals in the second quarter.

Its operating expenses were cut by 177m riyals in the second quarter as selling and marketing costs fell by 73m riyals and general and administration expenditures reduced by 201m riyals. But this was offset by an increase in depreciation and amortisation by 97m riyals, STC said.

STC proposed an interim dividend of 1 riyal per share, equating to about 2bn riyals, to its shareholders for the second quarter.

The company is also rolling out a fifth-generation network across the kingdom. By February, it had deployed its 5G network in more than 47 cities.