Reuters - 18/4/2006
Saudi Telecom (STC) <7010.SE>, the kingdom's second-largest listed firm, posted a first-quarter net profit of 3.42 billion riyals ($910.7 million) on Monday, up 13.4 percent from the same period a year ago.
Operating income reached 8.52 billion riyals at the end of March, a rise of 7.5 percent from the same period in 2005, Saudi Arabia's main telecoms operator said in a statement.
Shares in the company gained 1.53 percent on Monday, bucking a general downward trend in the market, having risen 6.3 percent on Sunday.
"The results are generally in line with expectations," said Faisal Hasan, senior financial analyst at Global Investment House. "But growth in net profit in 2006 will not be as (strong) as in 2005," he added, predicting growth of around 20 percent.
Full-year net profit rose 34 percent to 12.45 billion riyals in 2005, but annual revenue growth fell to 7 percent in 2005 from 12 percent the previous year because of fresh competition in the mobile phone business.
STC, which has a monopoly on fixed-line services, faces competition this year in the mobile phone sector from newcomer Ettihad Etisalat (Mobily) <7020.SE>, which started operating a 12.9 billion riyal second mobile network licence in May.
Mobily, a joint venture between Saudi and United Arab Emirates investors, has rapidly expanded its subscriber base.
STC said it would pay shareholders a dividend of 1.25 riyals, or a total 2.5 billion riyals for the first quarter.