Saudi Telecom Q4 profit plunges 79% on one-off charges

Saudi Telecom Co (STC), the Gulf’s No 1 telecom operator, reported a 79% plunge in fourth-quarter profit yesterday, 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 468mn riyals ($124.8mn) in the three months to December 31, down from 2.28bn riyals 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 2.4bn riyals. 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 641mn riyals - and changes in Indian telecom regulations which resulted in a charge of 544mn riyals, related to Aircel. Quarterly operating income fell 32.5% to 1.9bn riyals. Revenue from services for the fourth quarter fell 1.7% to 15bn compared with 15.2bn for the corresponding quarter last year. Full-year profit for 2012 was 7.4bn riyals, down from 7.7bn riyals 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 0.5 riyal per share dividend for the fourth quarter. Zain Saudi Indebted telecom operator Zain Saudi reported a 4% narrowing of fourth-quarter loss but still missed analyst forecasts, the firm said in a bourse statement yesterday. Saudi Arabia’s No 3 mobile company, an affiliate of Kuwait’s Zain, made a net loss of 443mn riyals ($118.1mn) in the three months to December 31. This compares with a net loss of 461mn riyals in the prior-year period. Analysts polled by Reuters on average forecast Zain Saudi would make a quarterly loss of 387mn riyals. In a bourse statement, the company attributed the narrowing loss to a decrease in financial charges. Quarterly gross profit was 739mn riyals, up from 691mn riyals a year ago. Loss from operations widened by 23% to 262mn riyals, compared with 213mn riyals for the same quarter last year. The company made a full-year loss of 1.7bn riyals in 2012. This compares with a loss of 1.93bn riyals a year earlier. Zain Saudi has struggled under mounting losses and multibillion dollar debts. The firm extended the maturity of a 9bn-riyal ($2.40bn) Islamic loan for another six weeks on December 19, the sixth time it has deferred payment. Parent firm Zain in July increased its stake in Zain Saudi to 37% from 25% after underwriting the affiliate’s capital restructuring. Kingdom Holding Saudi Arabia’s Kingdom Holding, the investment firm of billionaire Prince Alwaleed bin Talal, posted an 11.6% increase in its fourth-quarter net profit, it said in a bourse statement yesterday. The firm made a net profit of 209.6mn riyals ($55.9mn) during the three months ending in December, compared with 187.8mn riyals in the same period a year earlier. “The increase in net income for the current period compared to the same period last year is due to an increase in income from real estate investments, gain on sale of certain hotels, increase in dividend income and decrease in general and administrative expenses,” the statement said. Operational profit for the fourth-quarter rose by 2% to 290.6mn riyals compared with 285mn riyals in the same period a year earlier. The investment firm has minority stakes in some of the world’s top companies. Aside from being one of the largest shareholders in Citigroup, it also owns stakes in Rupert Murdoch’s News Corp and microblogging site Twitter. The firm said in December it will book a $32.9mn profit on the sale of New York’s Plaza Hotel to an Indian conglomerate. Boubyan BankKuwait’s Boubyan Bank said yesterday full-year net profit jumped 25% to 10.05mn Kuwaiti dinars ($35.65mn) in 2012 from 8.03mn dinars in the previous year. Boubyan, a Shariah-compliant unit of National Bank of Kuwait, said in a statement posted on the Kuwait bourse website that its full-year earnings per share climbed to 5.75 Kuwaiti fils from 4.59 fils in 2011. Fourth-quarter net profit more than doubled to 2.42mn dinars in 2012 from 1.13mn dinars in the same period of the previous year, according to Zawya Dow Jones calculations and Zawya.com data. Total assets stood at 1.88bn dinars at the end of 2012, up 22% from 1.55bn dinars a year earlier, the bank said in the statement. Boubyan also said that its board has proposed a 5-for-100 bonus share distribution for 2012. Bank Audi Lebanon’s Bank Audi said full-year net profit rose 5% in 2012 as assets and deposits increased, off-setting a slowdown in war-torn Syria and a jump in expenses related to the launch of its Turkish unit. Net profit climbed to $384mn in 2012, from $365mn in the previous year, the country’s biggest lender by assets said in a statement late on Sunday. Total assets stood at $31.3bn at the end of 2012, up 8.9% compared with a year earlier, the bank said. It added that the asset increase is largely mainly due to customer deposit growth at its Lebanese and Turkish operations. Overall deposits rose 8.1% on the year to $26.8bn, while the bank’s lending portfolio jumped 22% to $10.5bn, according to the statement. “Lending growth was coupled with a strengthening of the lending portfolio quality through the allocation of additional net provisions worth $121mn during 2012, most of which in the form of collective provisions,” the lender, also known as Audi Saradar Group, said. It added it plans to open nearly 100 branches in Turkey and “to build an asset and a profit base that would allow the Turkish subsidiary to rank second to Lebanon within the group.” Tasnee Saudi Arabia’s National Industrialisation Co, better known as Tasnee, reported a fourth-quarter net profit of 242mn Saudi riyals ($64.5mn) yesterday, down 56% from 544.1mn riyals a year ago, due mainly to lower titanium dioxide prices. Tasnee’s quarterly effort was well fell short of the 332mn riyals that analysts at NCB Capital had expected. The company blamed its year-on-year earnings slump on a drop in sales volumes and titanium dioxide prices. This outweighed profit increases in the petrochemical sector, Tasnee added. Petro Rabigh Saudi-based Rabigh Refining and Petrochemical Co (Petro Rabigh) said it swung to a fourth-quarter net profit of 68.1mn Saudi riyals ($18.2mn), up from 50.3mn riyals in the same quarter a year earlier, on higher sales price of polymer products. The company’s operating profit for the fourth quarter was 103.8mn riyals compared with 53.7mn riyals a year ago, the company said in a statement posted on the Saudi market website. Net profit for the 12 months ended December 31 was 488.9mn riyals versus 65.9mn riyals for the same period of the previous year. “The reason for the increase in net profit for the year versus last year is due to improved gross profit as a result of higher operation capacity in 2012 compared to 2011 when plant shutdowns were experienced due to periodical test and inspection,” the company said, adding that profit was higher in 2012, despite the deterioration in gross margin on hydrocarbon products compared to 2011. State-owned Saudi Arabian Oil Co (Saudi Aramco) and Japan’s Sumitomo Chemical Co each hold a 37.5% stake in Petro Rabigh, with the remaining 25% owned by the public, according to Zawya.com.NBK The outlook for Kuwait’s banks has improved after a turbulent year thanks to an expected increase in state infrastructure spending, the head of Gulf state’s largest lender said. Ibrahim Dabdoub, group chief executive officer of National Bank of Kuwait (NBK), said there was cause for optimism this year as the government adopts a more dynamic fiscal policy and accelerates spending on mega projects. “The recent directions from the highest authority and the proposed measures to boost economic activity and spur growth are expected to lift the overall sentiment and create new opportunities in the local economy,” he said yesterday. Dabdoub said the improvement came after a “stagnant” local economic environment in 2012, during the fourth quarter of which the lender beat analyst expectations with a steady net profit. NBK reported a marginal rise in its 2012 net profit, overcoming what it said was a turbulent and stagnant year for the banking sector. NBK said its net income for 2012 was 305.1mn dinars ($1.08bn) compared to 302.4mn dinars ($1.07bn) in 2011, a mere 0.9% year-on-year rise. Its fourth quarter to December net profit, however, dipped by 2.0% to $263.8mn from $269.1mn in the corresponding period of the previous year. The bank’s assets, meanwhile, grew a healthy 20.6% in 2012 to $58.2bn from $48.2bn a year earlier, while shareholders equity rose 6.0% to $8.1bn from $7.7bn. NBK said it would pay a reduced annual dividend of 30 Kuwaiti fils per share and five bonus shares for 2012. In 2011 the dividend was 40 fils per share and 10 bonus shares.