Arabian Internet and Communication Services (7202) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached SAR 5,580 million, up 4% year-over-year, maintaining a 22.7% market share in KSA.

• Net profit rose 25% year-over-year to SAR 806.9 million, supported by one-time income from a non-core product disposal and lower Zakat expense.

• Strong free cash flow in Q2 2024, with a net cash position of SAR 1.2bn after dividend distribution.

• Dividend per share increased to SAR 6.00 for 2023, reflecting a 60% payout ratio.

• Continued focus on sustainability, operational excellence, digital transformation, and regional expansion through acquisitions.

Financial highlights

• H1 2024 revenue: SAR 5,580mn (+4% YoY); EBITDA: SAR 909mn (+4% YoY); Net profit: SAR 806.9mn (+25% YoY).

• Gross profit margin declined 131bps YoY to 23.6% but rebounded to 25.1% in Q2 2024.

• EBITDA margin at 16.3% (+3bps YoY); Net profit margin at 14.5% (+248bps YoY).

• Capex intensity at 1.0%; ROIC at 38.0%; ROAE at 53.1%.

• Net cash from operating activities was negative in H1 2024 due to working capital cycle, but improved in Q2.

Outlook and guidance

• Maintains FY 2024 guidance: revenue growth of 8–11%, EBITDA margin of 13–15%, capex intensity of 1.0–1.5%.

• Healthy backlog, growing project pipeline, and recent acquisitions support revenue outlook.

• No material impact expected from contracts entered into or negotiated after the reporting date.