Saudi Telecom Q4 Profit Falls 79% On One-Off Charges
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Saudi Telecom Q4 Profit Falls 79% On One-Off Charges

Saudi Telecom Q4 Profit Falls 79% On One-Off Charges

The telecoms operator faced one-off charges related to affiliates in South Africa and India.

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Saudi Telecom Co (STC), the Gulf’s No.1 telecom operator, reported a 79-per cent fall in fourth-quarter profit on Monday, missing market expectations, after it took one-time charges related to affiliates in South Africa and India.

STC, which is majority government-owned, made a net profit of SAR468 million ($124.8 million) in the three months to Dec. 31, down from SAR2.28 billion in the prior-year period.

Analysts polled by Reuters on average forecast STC – the largest Gulf telecom operator by market value, with operations across the Muslim world from Indonesia to Turkey – would make a quarterly profit of SAR2.4 billion.

The former monopoly attributed the fall in net profit to charges on adjusting the fair value on its investment in South Africa’s Cell C and Aircel in India – leading to a one-off non-cash charge of SAR641 million – and changes in Indian telecom regulations which resulted in a charge of SAR544 million, related to Aircel.

Quarterly operating income fell 32.5 per cent to SAR1.9 billion.

Revenue from services for the fourth quarter fell 1.7 per cent to SAR15 billion compared with SAR15.2 billion for the corresponding quarter last year.

Full-year profit for 2012 was SAR7.4 billion, down from SAR7.7 billion in 2011.

Soaring demand for broadband has lifted earnings in recent quarters, with STC offering bundle packages to woo customers back from rival operators Etihad Etisalat (Mobily) – an affiliate of UAE operator Etisalat, and Zain Saudi – part-owned by Kuwaiti group Zain.

STC said in a separate statement that it would issue a SAR0.5 per share dividend for the fourth quarter.

Shares in STC closed at SAR44 on Sunday.


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