Saudi Telecom Company (7010) Q3 2024 earnings summary

Executive summary

• Nine-month revenue reached SAR 56.63 billion, up 3.92% year-over-year, and net profit was SAR 11.23 billion, up 1.92% year-over-year; Q3 2024 revenue was SAR 18.96 billion and net profit SAR 4.90 billion.

• Strong cash position with SAR 24.44 billion in cash & equivalents and net cash of SAR 9.12 billion; total assets reached SAR 161.85 billion.

• Board recommended a 37.5% increase in annual cash dividends, raising payouts from SAR 8 billion to SAR 11 billion for the next three years, with a new policy of SAR 0.55 per share per quarter starting Q4 2024.

• Maintained leadership in ICT, consumer, and enterprise segments in Saudi Arabia, recognized as the most valuable telecom brand in the Middle East.

• Sale of a 51% stake in TAWAL to PIF was approved, with TAWAL and Digital Infrastructure for Investment Company classified as discontinued operations.

Financial highlights

• EBITDA for the nine months grew 4.65% year-over-year to SAR 18.36 billion; operating profit up 7.77% to SAR 11.46 billion.

• Gross profit for Q3 2024 was SAR 10.40 billion, with a margin of 55.76%, up from 46.40% in Q2 2024 due to cost efficiency and a SAR 1.5 billion withholding tax reversal.

• Free cash flow increased 24.13% to SAR 4.66 billion; net cash from operating activities up 19.10% to SAR 11.90 billion.

• Capex for the period was SAR 7.24 billion, with a Capex intensity of 12.8%.

• Dividends of SAR 0.40 per share were distributed for each of the first three quarters, with a new policy of SAR 0.55 per share per quarter starting Q4 2024.

Outlook and guidance

• New dividend policy of SAR 0.55 per share per quarter for the next three years, with potential for special dividends.

• Dividend policy reflects confidence in sustainable operating cash flows and continued expansion and diversification.

• Ongoing investments in 5G, digital infrastructure, and strategic partnerships to drive future growth and innovation.