Saudi Telecom (stc) shares go up by 3% after getting an $8.7 billion government contract
Shares of Saudi Telecom Company (stc) went up by as much as 3% on Tuesday after the company revealed a major $8.7 billion (SAR 32.4 billion) deal for telecommunications infrastructure with a government group, which has not been named.
Telecom Infrastructure
The agreement signed on Monday is about a project to build, manage, and maintain telecommunications infrastructure in Saudi Arabia. However, the name of the government organization involved has not been revealed.
The project will start with an 18-month planning and execution phase, followed by 15 years of operations.
This contract is expected to bring significant financial gains for stc, and the company expects to start earning revenue in the fourth quarter of 2026. The revenue will continue for the next 16.5 years.
Q3 Performance
In November, stc reported a 3.4% increase in third-quarter revenue compared to the previous year, reaching $4.97 billion (SAR 18.64 billion). This increase was mainly due to higher earnings from subsidiaries. However, the company’s net profit for the quarter decreased by 5.3%, down to $1.2 billion (SAR 4.6 billion).
For the first nine months of the year, revenue grew by 3.9% to $15.1 billion (SAR 56.6 billion), driven by the success of subsidiaries, and net profit rose by 1.9% to $2.99 billion (SAR 11.2 billion).
Recent Developments
In a separate announcement, stc said it completed a deal with the Public Investment Fund (PIF) in December. As part of the deal, stc transferred ownership of Golden Lattice Investment Company (GLIC) to a new company on December 31, 2024.
Stc also sold a 51% share of its subsidiary, Telecommunications Towers Company (TAWAL), to PIF.
Big Number
stc’s market value is $56.5 billion (SAR 211.7 billion) as of January 28, 2025, according to Tadawul.
Published: 29th January 2025
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