Mobily trims debt by over SAR 2B in 2024, logs highest profit margin among peers: CFO

The Saudi-listed telecom operator’s continuous pursuit of operational excellence and efficiency has helped boost profit growth, leading to record net earnings and the strongest profit margin among sector peers.

Mobily's customer base witnessed robust growth, as the number of mobile subscribers increased 4% year-on-year (YoY) to 12.3 million. Further, it maintains a stable base of fiber-optic subscribers, according to the top executive.

He pointed out that these results reflect the company's continued investments in infrastructure development, especially in 5G and internet of things (IoT) networks. This is in addition to its expanded strategic partnerships in the corporate sector.

Mobily announced distributing a cash dividend of SAR 1.3 per share for H2 2024, bringing the full-year dividend to SAR 2.20 per share, up 52% compared to a year earlier, said Abanami.

He also stressed the company’s commitment to a sustainable distribution policy that maximizes investor yields, leveraging its strong financial performance and operational efficiency.

Below is the full interview:

Q: What factors contributed to Mobily’s 39.2% net profit growth in 2024?

A: In 2024, Mobily achieved record levels of financial and operational performance - the highest in the past 11 years - in line with the performance trends presented for the year.

It saw higher revenues backed by growth in all segments, in addition to the expanded customer base. Our continued pursuit of operational excellence and efficiency has fueled growth in EBITDA, as well as Murabaha and Zakat expenses, which supported the record net profit growth and strong profit margin, the highest in the market.

In the efforts to ensure an optimal capital structure while minimizing the risk of interest rate fluctuations, Mobily managed to cut its debt balance over the past five years. It restructured its debt portfolio this year on more favorable terms, cutting the total by over SAR 2 billion and lowering borrowing costs by about 11%, which reflected positively on Mobily’s financials. This, as a result, fundamentally restructured its capital, with a strong net debt to EBITDA ratio of 0.89x.

Q: What were changes seen in the retail-to-business customers ratio by 2024-end, compared to last year?

A: The corporate segment’s growth was one of the key influential drivers of Mobily’s revenue growth. This came as a result of the company's efforts to promote digitization and product innovation, in addition to its strategic partnerships with the government sector, the corporate sector, and small- and medium-sized enterprises (SMEs).

We have achieved record growth in carrier and operator services segment, backed by significant infrastructure investments, the latest of which was the launch of the first locally-owned submarine cable in Saudi Arabia. We also forged an agreement to host Red Bull Mobile as a mobile virtual network operator and obtained a 15-year license for an additional 120 MHz of spectrum to meet the growing demand for high-speed data services in the retail and corporate markets.

The retail segment has grown steadily as a result of Mobily’s endeavor to create sustainable value for its customers and optimize their experience. These efforts reflect the telecom operator’s market position and its role as a national partner in Saudi Arabia’s transformation into a digital hub, in line with Saudi Vision 2030.

Q: What is Mobily’s estimated market share in the mobile and internet market on the retail and corporate levels in 2024?

A: In 2024, Mobily reported an expanded client base, with the number of mobile subscribers reaching 12.3 million, marking a near 4% YoY hike. The telecom operator also maintained a strong base of fiber-optic subscribers, driven by continued investments in enhancing infrastructure. This includes network development and expansion of the 5G network reach, IoT, data centers, and submarine cables.

Mobily continues to enrich its customers' experience, earning several prestigious awards in this field. Notably, it received the "Best User Experience" award from the Communications, Space & Technology Commission (CST) for the third consecutive year, making it the only operator to have won this award since its inception.

These achievements reflect Mobily’s ongoing efforts and commitment to enhancing customer experience and maintaining competitiveness among service providers.

Q: Can you elaborate on Mobily’s dividend policy given the latest H2 2024 dividend announcement?

A: Mobily has been committed to diversifying its product and solutions range to meet the evolving needs of its customers, while striving to offer the best services and experiences to its partners. This strong performance, along with operational efficiency, enabled Mobily to resume interim dividend distributions in 2024 after a 10-year hiatus.

Additionally, Mobily raised shareholder distributions by nearly 52%, bringing the total dividend for 2024 to SAR 2.20 per share. Mobily remains committed to creating added value for its investors and maximizing their returns in line with its sustainable capital structure strategy.

Q: Could you highlight your most prominent sustainability activities?

A: Mobily continues to solidify its position as a leader in sustainability within the information technology and communications (ICT) sector, aligning with Saudi Vision 2030’s environmental, social, and governance (ESG) goals.

In 2024, the company made significant progress in reducing carbon emissions through sustainable technologies and renewable energy sources. It also launched effective waste management and recycling initiatives, ensuring zero landfill waste from its operations.

This is besides enhancing its network infrastructure and improving energy efficiency, while maintaining top-tier data privacy, with no reported data breaches.

It also remains committed to local talent development and governance excellence. As a result, Mobily earned rating upgrades across multiple global ESG indices, notably achieving an "AA" from Morgan Stanley Capital International (MSCI) in 2024, making it the first telecom company in the region to attain this milestone.