STC sees H1 profits slump by 30%
Decrease due to forex losses and booking of one-off charge relating to Asian units
Saudi Telecom Company (STC) has announced that net profit for the first half of 2013 fell by 30% compared to the same period last year.
Net profit totalled SR2.979bn ($794m) compared to SR4.929bn, with second quarter net profit reaching SR1.429bn, a decrease of 41%, and a decrease of 8% compared with the previous quarter.
The decrease in net profit for the first half of 2013 was attributed to the booking of a one-time, non-recurring and non-cash charge of SR1.104bn resulting from fair valuation of its investments in Asia (Aircel and Axis) and unrealised FX losses of SR601m.
Impacting the results was also the disposal of fixed assets with a net book value of SR277m during the first quarter, the telco said in a statement.
STC group chairman and managing director, Abdulaziz Al-Sugair, said: "The financial results for the first half of 2013 were overall good, reflecting STC group capability of delivering high single-digit, top-line growth.
"Revenues from domestic operations during the first half of 2013 increased 5% as a result of the growth in business sector and broadband [fixed and wireless] services revenues.
"STC will continue to provide more focus on these growing sectors domestically and make all resources available in order to capture the largest share of this growth in the future," he added.
Alsugair said: "The overall results for the Group were adversely impacted by the international operations both due to fair valuation of our investments in Asia [Aircel and Axis] and unrealised FX losses due to the sharp depreciation of Turkish lira, Indian rupee and Indonesian rupiah.
"This negative impact from some of the international operations is not expected to continue as STC investments in Asia had been written down to its fair value, and currently we are looking into rationalisation of STC international portfolio.
"Currently, the management is evaluating options for some of these investments in order to take appropriate actions in the best interest of the shareholders."