Saudi Telecom Co (STC), the Gulf’s No.2 telecom operator, missed forecasts with a 38.5 per cent year-on-year plunge in first-quarter net profit on Sunday attributed to charges relating to an Indian affiliate.
The firm, still majority government-owned nearly a decade after being listed, posted a net profit of SAR1.55 billion ($413 million) for the three months to March 31, down from SAR2.52 billion a year earlier.
STC was expected to post a profit of SAR2 billion, a Reuters poll of analysts showed.
The company said in a separate statement that it would distribute first-quarter dividends of SAR0.5 per share.
It said its gross profit rose 2.6 per cent but it had to take “non-cash charge of SAR500 million” relating to Aircel, an affiliate in India.
Two STC chief executives have quit in less than a year, while the heads of its domestic and international operations also resigned within the same period.
Its main competitor, Etihad Etisalat (Mobily), reported an 11 per cent rise in first quarter net profit on Saturday.
STC’s quarterly revenue for services rose to SAR11.5 billion from SAR11.1 billion a year earlier.
Rising demand for broadband lifted earnings in the first nine months of 2012, but the company then reported a 79 per cent drop in fourth-quarter profit citing rising costs and one-off charges at its Indian and South African affiliates.