Saudi Telecom Company (STC) has approved the company’s commitment to distribute 0.55 riyals per share for each quarter for the next three years, starting with the fourth quarter of 2024 and ending with the third quarter of 2027, according to the company’s disclosure today, Sunday, to the Saudi Stock Exchange.
These distributions represent an increase of 37.5% over the distributions announced by the company for the second quarter, during which the company achieved a growth in its net profits of 9.8%, reaching profits of 3.3 billion riyals.
The new dividends mean the company will provide its investors with at least SAR 2.7 billion per quarter during that period. It indicated that it may consider paying additional dividends after evaluating the company’s financial position, future prospects, strategic investments and capital requirements.
Saudi Telecom Company (STC) profits grew by 9.8% year-on-year during the second quarter of this year, reaching 3.3 billion riyals, as analysts expected the company to achieve 3.17 billion riyals in net profits.
The profit growth was supported by a 4.5% increase in total revenues for the same period to 19.16 billion riyals. However, it came in below analysts’ expectations of 19.3 billion riyals.
STC has been actively looking for opportunities to acquire stakes in European telecom companies. Bloomberg reported earlier this year that the company was close to acquiring the Portuguese business of Altice, after submitting the highest bid.
The Saudi telecom giant revealed its intention to buy a 9.9% stake in the Spanish telecom company Telefonica for about 2.1 billion euros, which prompted the Spanish government to decide to buy a 10% stake in Telefonica in response to the acquisition plan by STC.
In April of this year, the Public Investment Fund and STC signed an agreement to form a new entity that owns and operates about 30,000 telecommunications towers in 5 countries, after they signed another agreement to sell 51% of the shares of the telecommunications towers company, Tawal, to the fund.
STC’s full-year 2023 profits increased by 9.2% to reach SAR 13.3 billion, supported by the company recording revenues of SAR 72.3 billion.
Saudi Arabia's STC Group is considering making an offer to buy European telecom and pay-TV company United Group.
According to Reuters, the Saudi Telecom Company is in the early stages of studying the possibility of submitting an offer to buy the European company, adding that the deal is not yet confirmed and may not happen.
BC Partners, which acquired United Group in 2019, is working with advisers on a sale of the company, which is set to begin in the coming weeks, the agency reported. The deal could value United Group at around 8 billion euros ($8.7 billion), including debt, it said.
Spokespeople for STC Saudi Arabia and PC Partners declined to respond to requests for comment, according to Reuters.
If STC succeeds in reaching a deal to buy United Group, this would enhance its expansion in the European telecom sector.
Last year, Saudi Arabia’s largest telecom company acquired a 4.9% stake in Spain’s Telefonica, with the possibility of raising its stake to 10%, and in 2023, its subsidiary, Tawaul, acquired telecom towers owned by United Group in Bulgaria, Croatia and Slovenia.
