| Element | Current quarter | Similar quarter for previous year | % Change current | Previous quarter | % Change previous |
|---|---|---|---|---|---|
| Net profit (loss) |
2,391
|
1,550
|
54.26
|
3,623
|
-
|
| Gross profit (loss) |
6,211
|
6,494
|
-
|
6,992
|
-
|
| Operational profit (loss) |
2,666
|
2,218
|
20.2
|
2,852
|
-
|
| Earning or loss per share, Riyals |
1.2
|
0.77
|
-
|
-
|
-
|
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element | EXPLAINATION |
|---|---|
| Reasons of increase (decrease) for quarter compared with same quarter last year | The net profit for the 1st quarter increased by SR 841m (54%) compared to the comparable quarter in the previous year mainly due to the following: (1) The comparable 1st quarter of 2013 numbers includes: - A non-recurring and non-cash charge of SR 500 million for impairment of intangible assets pertaining to Aircel, India. There are no one-off provisions pertaining to the above in the 1st quarter of 2014 and as a result the operating profit for the quarter is higher by 20% compared to corresponding period last year. - Net loss of SR 287 million resulting from consolidating Axis (Indonesia) financial results, which was not consolidated during the 1st quarter 2014 as a result to selling Axis and exiting the Indonesian market (as announced in Q1, 2014) (2) The decrease in )losses from investments accounted for under equity method( by SR 409m (79%). In the 1st quarter last year there was losses of SR 516m and for this quarter, the losses declined to SR 107m. This has resulted from stopping to account for the investment in Aircel Group using the equity method effective from the second quarter 2013 (as announced earlier). (3) The SR 283 million increase in )Other Income & Expenses; Other, net( for the current quarter compared to the same period last year, mainly due to the disposal of fixed assets with a net book value of SR 277 million that was recorded during the 1st quarter of 2013 which resulted from the fixed assets verification project held by the company during that period, and that was a one-time, non-recurring and non-cash charge. (4) The increase in the provision for Zakat & Tax by SR 229m (383%) compared to the same period last year. (5) The SR 283m (4%) decline in Gross profit for the current period compared to the same period last year as a result to the decline in revenues from services for the current quarter. |
| Reasons of increase (decrease) for quarter compared with previous quarter | The Net Profit for the 1st quarter decreased by SR 1,232m (34%) compared to the immediate prior quarter due to: (1) The decline in operating profit for Q1, 2014 by SR 186m (7%) compared to the immediate prior quarter, mainly as a result to the decline in revenue from services compared to the previous quarter. (2) During Q4 2013, STC group reversed its share of losses from Aircel Group for the period from 1 April 2013 to 30 September 2013 amounting to SR 795m (as announced earlier). As a result the profit for the previous quarter was higher compared to the current quarter by SR 795m due to this reversal. (3) The increase in the provision for Zakat & Tax by SR 227m (366%) compared to the immediate prior quarter. |
| Reclassifications in quarterly financial results | Certain comparatives figures for the period ending at 31 march 2013 have been reclassified to conform with the presentation used for the period ending at 31 march 2014. |
| Other notes | Revenue from services for the 1st quarter amounted to SR 10,783 million compared to SR 11,474 million for the corresponding period last year, a decrease of 6 %. Earnings before interest, taxes, zakat, depreciation and amortization (EBITDA) for the 1st quarter amounted to SR 4,290 million compared to SR 3,834 million for the corresponding quarter last year, an increase of 12%. Commenting on the results, STC Group chairman and managing director, Mr. Abdulaziz Alsugair, stated: )The financial results achieved during the 1st quarter of the current year reflects the efforts being made to constantly evolve, improve and develop the company strategy and operations both domestically and internationally. We continue to maintain an acute focus on reinforcing our presence in our home market. At the same time, we continue to rationalize STC international portfolio, and evaluate options for some of these investments in order to take appropriate actions in the best interest of the shareholders.( Mr. Alsugair also stated, )despite the decrease in consolidated revenue for Q1 by 6% compared to the same period last year, cost of services and operating expenses during the 1st quarter decreased 8% and 17% consecutively compared to the same period last year, as a result to the company continuous efforts to control cost and improve the overall efficiency of the operations. in the meantime, STC continued to grow its international operations, revenues from the controlled international subsidiaries (excluding Axis Q1, 2013 revenues for comparison purposes) grew 24% compared to corresponding period last year.( Mr. Alsugair concluded )We will continue with our ongoing efforts to remain customer-centric, which is clearly delivering results. This is a position we intend to maintain, by striving to lead through investing in technology and innovative solutions across fixed, mobile and data products.( Internationally, VIVA Bahrain & VIVA Kuwait continue to grow their customer base and the increase in their market shares. As a result, the revenue grew for both companies during the 1st quarter compared to the same period last year. Also, during the 1st quarter STC has fully exited from the Indonesian market (as announced earlier) with the completion of the sale transaction of its subsidiary in Indonesia PT AXIS Telekom (AXIS) and that the proceeds were used to settle AXIS debts with its lenders and vendors. Domestically, STC continues with the introduction of innovative and value added services that encourage mobile usage. This is underpinned by the Company customer-centric approach and its efforts to enhance the overall customers experience. The company, continued increasing the coverage of 3G & 3.5G networks to reach various parts of the country covering more than 96% of populated areas and deployment of the 4G network. During the 1st quarter, STC launched new postpaid plans with the tagline )The way you want it(. The plans will meet and address customers evolving needs, they are called Postpaid 30, 100, 200 and 400 for current and new customers. Current customers are able to upgrade to the new postpaid plans whenever they want. New customers can choose the monthly plan that suits their usage habits and benefit from discounts of up to SR 2,700 when purchasing any smartphone with a 12 or 18-month contract. These new plans will ensure that STC remains ahead of competition domestically. STC fiber optic network (homes & Businesses) reached more than 900,000 home pass (site), as a result, fiber optic services customers grew 54% during the 1st quarter compared to same period last year, and 5% compared to the previous quarter. The ongoing network expansion has also led to a further increase of 16% in the number of )InVISION( subscribers (STC Interactive TV service) during the 1st quarter compared to same period last year. In addition, the 1st quarter witnessed the launch of Jood 2 service with speeds starting from 10 to 200 Megabits to meet customers needs. Enterprise business unit overall revenues increased 15% during the 1st quarter compared the previous quarter and an increase of 5% compared to same period last year, driven by the 13% increase in Business sector data services revenues, and 4% increase in the fixed line revenues during the 1st quarter compared to same period last year. |
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