GO eyes new sectors, seeks to boost revenue to billions: CEO

Yahya Al-Mansour, CEO of Etihad Atheeb Telecommunication Co. (GO)

Etihad Atheeb Telecommunication Co. (GO) is in the advanced stages of launching a new strategy extending from five to seven years, with the aim to enter new sectors and achieve revenues in billions, CEO Yahya Al-Mansour told Argaam in an interview.

The strategy includes establishing new companies and acquiring others to increase GO’s size and share, along with serving various segments of customers.

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Commenting on the financial results for the fourth quarter ended March 2024, he said the last quarter showed some non-recurring costs.

Here are the details of the interview:

Q: The company recorded profits worth SAR 18 million for Q4 2023/24, a decrease of 76% quarter-on-quarter. What are your comments?

A: Annual results were good and historic, as the company’s revenues exceeded SAR 1 billion with a growth rate of 61%. Earnings per share (EPS) hit SAR 6.43, with a remarkable annual net profit of SAR 193 million, marking a surge of 358%.

GO continues to grow in a stable manner, however, Q4 profit was less than Q3 since the previous quarter included non-recurring profits of SAR 34 million from the agreement settlement with TAWAL Co. to settle all balances and dues, and transfer ownership of telecommunications towers.

The previous quarter also included some non-recurring costs, including offering costs for capital increase at SAR 8 million, as well as the costs of disposing of some useless assets at SAR 7 million and non-recurring annual costs such as employees and board of directors’ bonuses, Zakat, and some financial provisions.

Q: What is different about GO’s current business model? What are the company’s key target sectors?

A: We have developed a transformation strategy based on a comprehensive assessment of the company’s situation and identifying gaps and demand in the market for nearly three years. GO has been providing advanced digital solutions services rather than regular telecommunications services with a special focus on the business sector due to higher profit margins when compared to the retail sector. Accordingly, the business sector’s contribution exceeded 50% of the company’s revenues and profitability, and we expect this contribution to increase during the coming period.

We aim for GO to be part of the digital transformation initiatives of the Vision 2030, and therefore we provide our customers with complete digital solutions for various sectors to facilitate their internal and external operations.

We have provided new services such as cloud computing, the Internet of Things (IoT), and data centers, won mega government, Saudi Vision and private sector projects, and we are working to increase our market share of these services through work innovation and flexibility.

We are currently in the advanced stages of launching a new five to seven-year strategy for GO, which aims to meet the high market expectations and continued sustainable growth over the coming years. The strategy will include entering new sectors and serving various segments of customers, through which we seek to achieve revenues worth billions of Saudi riyals.

Q: Does the company’s new strategy include entering sectors such as financial technology (Fintech)? Are you planning on creating such companies or acquiring existing ones?

A: We will announce these details soon, but what can be said now is that GO will provide new services in sectors different from the telecom sector, and we intend to establish new companies and acquire existing ones.

In the transformation strategy, we were able to increase the company’s market capitalization from approximately SAR 250 million to SAR 4 billion, and in our next strategy we plan to grow further every year.

Q: How will the company’s commitments affect the achievement of your new strategy and targeted growth?

A: We dealt with the company’s commitments efficiently so that they do not affect liquidity and cash flows, and we committed to repayment installments with the authorities. Most recently, the company signed an agreement with TAWAL to settle all balances and receivables, and transfer ownership of the telecommunications towers. Furthermore, we have signed a settlement agreement with the Communications, Space and Technology Commission (CST), which resulted in the write-off of SAR 64 million of disputed government receivables, in addition to paying SAR 63.8 million in installments over seven years starting in 2025.

The company also concluded an agreement with CST and stc Co. to postpone the repayment of debts over long periods and in appropriate installments, some of which begin in 2025. This is in order to ensure the availability of liquidity for new investments.

Q: How much is the company’s current backlog? What are the expectations of its impact on the company’s profits?

A: GO was able to obtain important contracts such as the memorandum of understanding (MoU) with Aramco Digital, which is still in the early stages, and the contract with the Technical and Vocational Training Corporation (TVTC) worth SAR 45.5 million that was recently announced.

We are currently working on large project contracts to keep pace with the rapid changes in the market and technologies. We focus on building strong relationships with existing clients and attracting new ones. GO expects to obtain future contracts that will have a significant positive impact on its revenues and profits.