Saudi Telecom Company (7010) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached SAR 19.21 billion, up 1.60% year-over-year, with net profit rising to SAR 3.65 billion, reflecting 11.05% to 19% growth depending on reporting, and comprehensive income totaling SAR 4.4 billion.

• Maintained robust cash and equivalents at SAR 28.40 billion, with net cash position of SAR 13.27 billion and total assets at SAR 162.6 billion.

• Recognized as the most valuable telecom brand in the Middle East for the fifth consecutive year and 9th globally.

• Completed transfer of TAWAL ownership, now holding a 43.06% stake in Digital Infrastructure for Investment Company.

• Achieved strategic milestones including STC Bank launch, eSIM technology localization, and major infrastructure agreements.

Financial highlights

• Gross profit rose by 5.01% to SAR 9.10 billion, with gross margin improving to 47.36%.

• Operating profit grew 2.02% year-over-year and 20.67% sequentially, with margin up 0.42% year-over-year.

• EBITDA increased by 5.25% year-over-year to SAR 6.12 billion, with margin up 3.59% year-over-year.

• Net profit margin improved to 19%–19.3%, with basic and diluted EPS from continuing operations at SAR 0.73.

• Dividend yield reached 8.60% with a payout ratio of 78%.

Outlook and guidance

• Committed to a fixed quarterly dividend of SAR 0.55 per share for the next three years, with potential for special dividends.

• Special cash dividend of SAR 2 per share for 2024 recommended, pending shareholder approval.

• Strategic investments and disciplined Capex approach, with Capex intensity at 8.64% for the quarter.

• Positive financial impact expected from SAR 32.64 billion government contract, with revenue recognition starting Q4 2026.

• Continued focus on digital transformation, AI, and cloud services through strategic partnerships.