Arabian Internet and Communication Services (7202) Q3 2024 earnings summary

Executive summary

• Maintained market leadership with a 22.7% share, diversified project pipeline, and a 36.6% ROIC in 9M 2024, supported by a net cash position of SAR 2.0 bn.

• Revenue for the nine months ended 30 September 2024 reached SR 8,333 million, up 2% year-over-year, with net profit rising to SR 1,270 million, a 23% increase from the prior year period.

• Completed two notable acquisitions: a 70% stake in Logical Application for Business Solutions (LABS) and a 40% stake in Devoteam Middle East, expanding system integration and digital services.

• Value-accretive M&A and technological partnerships drive growth and diversification.

• Recognized a gain of SR 68.3 million from the sale of the Automated Vehicle Locator (AVL) service channel.

Strategy Update

• LEAP 2.0 strategy focuses on core business growth, emerging tech, and operational efficiency.

• Emphasis on IT professional and managed services, network, and multi-cloud capabilities.

• Pursues business diversification, innovation, and geographical expansion.

• Prioritizes customer experience, commercial excellence, and sustainability.

Financial highlights

• Revenue grew 2% YoY to SAR 8,333mn in 9M 2024; net profit surged 23% YoY to SAR 1,270mn; net profit margin up 263bps to 15.2%.

• EBITDA rose 5% YoY to SAR 1,462mn; EBITDA margin improved by 52bps to 17.5%.

• Gross margin declined 157bps YoY to 24.5% but improved sequentially in 3Q 2024.

• Operating profit for the nine months reached SR 1,255 million, compared to SR 1,183 million in the prior year.

• Capex increased 190% YoY to SAR 255mn; capex/revenue ratio at 3.06%.