Saudi Telecom posts 38.5% fall in Q1 net profit
Gulf's number-two operator sees earnings of $413m
Saudi Telecom Co (STC) yesterday reported a 38.5% year-on-year drop in first-quarter net profit, citing a one-off charge concerning Indian affiliate Aircel, Reuters reported.
Expectations for STC's performance in Q1 had not been high following a 79% plunge in Q4 profit stemming from one-off charges in Indian and South African markets.
But the Q1 decline was even worse than industry pundits had predicted. Reuters analysts expected the Gulf's number-two operator to hit net earnings of SAR2bn, which would still have been a significant drop from SAR2.52bn in Q1 2012, but the company posted only SAR1.55bn ($413 million).
STC faces rising costs and stiffer domestic competition. On Saturday its main rival in the Gulf kingdom, Mobily, had posted an 11% rise in net earnings for the first quarter. STC has also been fraught with senior management changes, seeing the resignation of two chief executives in less than a year.