STC reports 7% revenue growth for 2012
- Saudi Arabia: Tuesday, January 22 - 2013 at 10:12
- PRESS RELEASE
Saudi Telecom Company (STC) announced the company's preliminary consolidated financial results for the period ending at 31 December 2012 (12 months).
The net income for the 4th quarter amounted to SR468m compared to SR2,278m for the corresponding quarter last year, with a decrease of 79%, and for the year, net income amounted to SR7,350m compared to SR7,729m for the corresponding period last year with a decrease of 4.9%. The decrease in net income for the 4th quarter & the 12 months (despite the 2.6% & 7.2% increase in gross profit consecutively) comparing with the corresponding periods last year, is attributed to two main reasons: First, the group re-evaluation of its investments fair value in in Cell C, South Africa and Aircel, India during the fourth quarter, which resulted in recognizing a one-time, non-recurring and non-cash charge of SR641m provisions from impairment of intangible assets. Second, due to the change in telecom regulations in India, Binariang group had to take a deferred taxes charge related to Aircel operations, STC group share of these deferred taxes was SR544m, and this is also a one-time, non-recurring and non-cash charge. With the exception of these two transactions, the net income would have been SR8,535m for the year, an increase of 10.4% compared to 2011. while the decrease in net income for Q4 compared to the previous quarter, is attributed to the 4.6% in the cost of services.
Board of Directors recommended the distribution of SR1,000m in cash dividend for Q4 2012, representing SR0.5 per share. The right of the dividends distribution and the dividends payment date will be announced later. Therefore, the dividends distributed to shareholders for the 1st, 2nd & 3rd quarters and the recommended dividends for the 4th quarter will reach SR4,000m at the rate of SR2 per share, which represent 20% of the share par value.
Dr. Khaled A. Alghoneim, the Chief Executive officer of Saudi Telecom Group commented on the results, "The financial results for the period ending 31 December 2012 - despite the provisions resulting from the impairment of intangible assets & deferred taxes booked during the fourth quarter - provides a solid base for the next phase of STC's growth. This will be underpinned by the new programme which was launched recently. The programme focuses on driving efficiencies and optimising operational performance across the group. At its core it will enable us to be more nimble, positioning the Group to seize opportunities offered by the rapidly evolving global telecommunications sector, which will lead to improved profitability and maximising shareholder value. We consider our ability to provide fully integrated ICT solutions to be fundamental to our future growth and we are investing significant capital and resource in the development of our technical capabilities to meet customer needs, in additional to ensuring the success of our strategic programme. The competitive environment in the sector requires more sustained and collaborative industry effort from the major global players. STC's ability to adapt to change through investment in creative, innovative solutions and the delivery of new customer-focused initiatives will be key driver of our future success."
Domestically, we continued with deploying our 3G & 3.5G networks to reach various parts of the country, continued with deploying 4G network to reach more than 2,500 sites, introduced innovative and value added services that encourage mobile usage, and targeted packages bundled with advanced smart phones. This is underpinned by the Company's customer-centric approach and its efforts to enhance the overall customers experience. These efforts are producing results, STC's total domestic mobile customer (postpaid & prepaid) Increased 9.3% compared to Q4 2011 and 2.6% compared to Q3 2012.
The wireless broadband customer base also grew well during the year. As a result, wireless broadband revenues grew by 64% during the year compared to 2011. This can be partially attributed to the increase in 3G and 4G coverage, which has led to the launch of new products and services that meet the needs of customers. Also, we have witnessed growth in QuikNet sales during the year.
STC's fiber optic customers (homes & Businesses) increased to more than 100,000 connected customers with an increase of more than 1000% compared to Q4 2011 and 48% compared to the immediate previous quarter, following the continued expansion of the "Fiber Optic" network (FTTH) & (FTTX) in Saudi Arabia as we have reached more than 500,000 home pass in December 2012 and to continue with the plan to reach 1.5m by 2014. STC's subscribers are now able to enjoy Internet speeds of up to 200 Mb/sec. The ongoing network expansion has also led to a further increase of 175% in the number of "InVISION" subscribers (STC's Interactive TV service) compared to Q4 2011 and 32% compared to the immediate previous quarter. Fixed broadband subscriber during this quarter grew 19% compared to Q4 2011. Also, the number of subscribers in bundled services grew by 15% during the quarter, compared to Q4 2011.
Enterprise business unit overall revenues increased by 9% during the quarter compared to same period in 2011, supported by the 28% increase in Business sector postpaid mobile revenues and the increase in Data circuits services by 14% during the quarter compared to same periods in 2011.
With regards to international operations, STC group during 2012 witnessed revenue growth of 40% in the controlled subsidiaries compared to 2011, driven by continued subscriber additions in post-paid, pre-paid and wireless broadband. However, our investments in Aircel, Cell C and Axis, were not performing up to expectations and we intend to employ continued focus to enhance the performance of these companies.
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