STC's Q3 figures in line with estimates, Riyad Capital says

Saudi Telecom Company (STC) posted a 3 percent YoY and 8 percent QoQ increase in net income to SAR 2.64 billion in Q3 2018, matching Riyad Capital's forecasts of SAR 2.63 billion, the brokerage said in a note.

Growth in bottom-line was driven by a rise in revenues despite facing higher financial charges and in early retirement costs.

The third-quarter revenue stood at SAR 13.3 billion, up by 6 percent YoY and 1 percent QoQ in line with expectations of SAR 13.2 billion, on the last Hajj season. Growth in the Enterprise and Wholesale business segments has also helped revenues.

Riyad Capital raised the stock's target price to SAR 78.00 from SAR 73.00 and maintained a Neutral rating.

"STC’s overall performance is praiseworthy given they have faced the brunt of the reduction in mobile termination rates and also been exposed to sector wide challenges such as the imposition of VAT and lifting of the ban on VoIP calls," the brokerage noted.