stc's net profit rises 9% to SAR 13.3B in 2023; Q4 at SAR 2.3B

Saudi telecom operator stc posted SAR 13.3 billion in net profit for 2023, an increase of 9% from SAR 12.2 billion in 2022.

This profit growth was driven by the SAR 4.90 billion year-on-year (YoY) rise in revenues in 2023 which was offset by an uptick in the cost of revenues of SAR 4.49 billion. Accordingly, gross profit leapt YoY by SAR 410 million last year.

Last year, stc’s cost of revenues was positively impacted by the reversal of a contingent liability provision estimated at SAR 1.07 billion.

The telco’s 2023 topline growth, alongside its continued investment in new domains under its strategy, and what this expansion entails in terms of higher operating expenses (OpEx) — especially in the start-up phase of companies associated with these investments, contributed to the SAR 1.29 billion surge in OpEx last year.

During the same year, stc’s gross other revenues plunged YoY to SAR 595 million as finance income escalated by SAR 910 million. In addition, the telco’s net share in the results and impairment of investments in associates and joint ventures amounted to a profit of SAR 53 million.

This was mainly because of booking an impairment provision related to the BGSM Management investment last year. In addition, net other gains soared YoY to SAR 1.08 billion as a result of booking gains worth SAR 1.29 billion from the sale of a land plot in Al Khobar.

This was partially offset by higher finance costs, costs of early retirement program as well as Zakat and income tax expenses.

The fourth-quarter net profit fell 17.5% YoY to SAR 2.3 billion.

Sequentially, stc reported a 53.6% drop in net profit from SAR 4.9 billion in Q3 2023.

Total shareholders’ equity, after minority interest, reached SAR 78.9 billion as of Dec. 31, 2023, compared to SAR 73.5 billion a year earlier.

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