reports
- Talha Nazr
STC: Q4 22 results analysis – Weaker than expected results on higher o...
STC reported a weaker than expected set of Q4 22 results. Although net income increased by 5.5% yoy (-22.1% qoq) to SAR2.76bn, it was lower than the SNB Capital and consensus estimates of SAR3.07bn and SAR2.8bn, respectively. Revenues increased by 8.6% yoy (+3.4% qoq) to SAR17.03bn and came in-line with our estimates. However, we believe the variance in earnings was mainly due to higher opex. Therefore, EBITDA margins contracted by 448bps yoy to 32.3% vs our estimates of 37.3%. * Revenues i...
- Talha Nazr
STC | Q4 Update | Digitisation growth potential with stable dividends
We upgrade STC to Overweight with a revised PT of SAR42.5. We believe the focus to transform to technology, asset monetization programs, and strong revenue growth from its subsidiary Solutions will drive STC going forward. Moreover, the completion of the towers deal and the potential increase in dividends are the short-term catalysts. We expect the company to record revenue and net income CAGR of 5.3% and 7.9% during 2021-24f to reach SAR74bn and SAR14.2bn, respectively. The stock is trading ...
- Talha Nazr
STC: Earnings Call Summary
EARNINGS CALL SUMMARY - STC H1 22 Below are the key highlights of STC’s H1 22 earnings call. I have attached our Q2 22 event flash report for your reference. FINANCIAL OVERVIEW * STC’s revenue grew by 7.4% yoy to SAR33.8bn in H1 22, driven by healthy growth across all business segments. * Gross profits in H1 22 increased 8.4% yoy while gross margins expanded by 50bps yoy to 54.0% mainly due to cost control measures by STC KSA, Bahrain and Kuwait. * STC operating profit in H1 22 inc...
- Talha Nazr
STC: Margin expansion offset by higher non-opex
STC reported a broadly in-line set of Q2 22 results with net income increasing marginally by 0.6% yoy (-6.5% qoq) to SAR2.84bn. This compares to the SNB Capital and consensus estimates of SAR3.10bn and SAR3.06bn, respectively. Revenue increased by 6.5% yoy (-0.3% qoq) to SAR16.94bn and came in-line with our estimates of SAR17.17bn. EBITDA and EBIT margins remained inline. The variance in earnings is mainly driven by the increase in losses from share in results of associates to SAR283mn vs our...
- Iyad KhalidÊGhulam
STC: Bonus issue, a positive stock momentum
STC TO BONUS ISSUE, A POSITIVE STOCK MOMENTUM STC BoD recommended to increase its capital 150% to SAR50bn, through the issuance of bonus shares via capitalizing SAR30bn from retained earnings. The company further added that the capital increase will help it in achieving its growth and expansion strategy. OUR VIEW * We believe this step should prove beneficial for the company in the long run, as it looks to pivot away from a traditional telecom service provider to a technology company. STC ha...
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