stc Group, a leader in the telecommunications and digital transformation sector in the Kingdom of Saudi Arabia, announced strong financial results for the fiscal year ending December 31, 2023, with net profit growing by 9.2% to reach SAR 13.3 billion, compared to SAR 12.17 billion in 2022. This outstanding performance reflects the success of the company’s expansion strategy and its ability to adapt to market changes and achieve sustainable growth.
General context and historical background
Saudi Telecom Company (stc) was established in 1998 as part of the privatization of the Kingdom’s telecommunications sector. It quickly transformed from a national telecom operator into a leading regional group offering integrated digital solutions. The company’s strategy, known as “DARE 2.0,” is closely aligned with the goals of Saudi Vision 2030, with stc playing a pivotal role in accelerating the Kingdom’s digital transformation across various sectors. This is achieved through investments in 5G infrastructure, cloud computing, cybersecurity, and digital payments via its financial arm, stc pay.
Financial performance details and reasons for growth
The company attributed this growth in net profit primarily to a 7.3% increase in revenue, reaching SAR 72.3 billion in 2023. This growth was driven by increased service revenue, particularly in the data and digital services sectors, as well as the strong performance of the group's subsidiaries. Gross profit also rose by 2.5% to SAR 37.6 billion, while operating profit reached SAR 14.4 billion. This performance reflects the company's ability to enhance its operational efficiency and maximize the value of its growing assets.
The importance of the event and its expected impact
These positive financial results are a strong indicator of the health of the Saudi telecommunications sector and its ability to attract investment. Domestically, these profits bolster investor confidence in stc shares as a leading stock on the Saudi Stock Exchange (Tadawul) and underscore the vital role the company plays in supporting the national economy. Regionally and internationally, this success supports stc's expansion ambitions and reinforces its position as a key player in the Middle East and North Africa markets, particularly following its strategic investments such as its acquisition of a stake in telecommunications towers in Eastern Europe through its subsidiary, Tawal.
Dividend distributions to shareholders
Reaffirming its commitment to delivering value to its shareholders, stc’s Board of Directors has recommended a cash dividend of SAR 1.99 billion for the fourth quarter of 2023, equivalent to SAR 0.40 per share. The company’s consistent dividend policy reflects its financial stability and confidence in future cash flows, making it an attractive investment choice for investors seeking stable returns.
