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Kuwait Telecommunications Company (stc), a world-class digital leader providing innovative services and platforms to customers, enabling the digital transformation in Kuwait, announced its financial results for the six-month period ended 30 June 2020.
|The financial results for the six-month period ended 30 June 2020|
|KD 136.4 mn||Revenue|
|KD 35.9 mn||EBITDA|
|KD 15.9 mn||Net Profit|
|32 Kuwaiti fils||EPS|
|KD 403.7 mn||Assets|
|KD 206.3 mn||Shareholder’s Equity|
|413 Kuwaiti fils||Book Value Per Share|
|1.72 mn||Customer base|
On this occasion, engineer Maziad Alharbi – stc’s Chief Executive Officer, stated: During the first half of this year, the telecommunications sector was amongst the least impacted sectors with regard to the losses and economic consequences when compared to the negative effects resulted from the current economic crisis, which have heavily affected numerous vital sectors worldwide. Despite the negative consequences associated with the COVID-19 outbreak, which had an adverse impact on businesses and vital sectors in general, stc was able to achieve these results through adopting a flexible operating model, implementing its digital transformation strategy and offering integrated advanced solutions that support the Kuwaiti government’s social distancing requirements for both individuals and corporates. stc has focused its efforts on building on the 5G network to deliver a range of services, including entertainment and digital services, meeting the growing demand for broadband high-speed networks, in addition to the corporate and institutional requirements for online institutional and educational interaction with the highest quality and efficiency.
Alharbi added: stc has proven its ability to overcome the economic challenges and the potential risks, while keeping up its business operations and serve its customers during such circumstances. stc has been located amongst the first class companies of the private sectors, due to the great efforts provided and the dedication of its employees, who demonstrated their determination to address the health risks we experienced from the spread of Corona pandemic. This was the main reason, which helped the company to continue providing services to its customers with the same quality standards despite the growing demand and the convergence of the communications with customers and customer delivery services to the digital platforms.
Being a pioneer and one of the most advanced companies in the telecommunications services industry and a digital transformation enabler in Kuwait, stc completed a number of projects in addition to introducing advanced services and products backed by the fifth generation technology, including the data link connection project between the International Hospital and the Ministry of Health (MOH), thermal cameras services, integrated solutions for Microsoft 365, 5G LIVEBUS and stc Digital Business services. In addition, launching the 5G E2E SA network with ARM based core and convergent billing services.
Commenting on these financial results, Alharbi stated: stc’s total revenues stood at KD 136.4 mn for the six-month period ended 30 June 2020 in comparison to KD 139.6 mn for the same period last year. The decrease in revenue is attributed to the full and partial lockdown implemented in Kuwait due to the COVID-19 outbreak, which resulted in a decline in the revenues from the consumer segment, in addition to the significant decline in revenues derived from roaming services due to the shutdown and suspension of flights in most airports around the world. Moreover, stc provided its customers with free unlimited local calls to all operators, as well as free 5GB daily data usage, which started on 22 March 2020 until 20 April 2020 in collaboration with the Communication and Information Technology Regulatory Authority (CITRA) during the COVID-19 crisis. Meanwhile, the business and enterprise sector witnessed a growth in revenues, due to the growing need and demand for digital and information services
On the other hand, EBITDA reached KD 35.9 mn during the first six-month period of 2020 compared to KD 38.6 mn during the same period in 2019. stc’s EBITDA margin reached 26.3% during the period compared to 27.7% in 2019. As a result, stc recorded a net profit KD 15.9 mn (earnings per share of 32 fils) with a profit margin of 12% for the first half of the financial year 2020.
The company has also been able to structure its capital expenditure, especially after the negative effects of the current economic crisis, in order to ensure liquidity of cash flows under the current circumstances. stc successfully achieved these results despite the economic challenges the world has witnessed following COVID-19. stc has managed to achieve good levels of revenues and enhance its operational efficiency to add value to its customers and achieve better returns for its shareholders”.
Alharbi Added: “stc’s financial results for the first six-month period of 2020 demonstrated the company’s ability to compete and enhance its position as the second largest telecom operator in the Kuwaiti telecom market with a revenue market share of 35%. With the ongoing repercussions and challenges we are facing due to the COVID-19 crisis, we at stc are implementing a cost optimization program in order to achieve the best results and enhance profitability through adopting a balanced and effective financial policy in relation to the operational and capital expenditure.
Considering the Company’s financial position as of 30 June 2020, total assets reached KD 403.7 mn, while total shareholders’ equity reached KD 206.3 mn, with a book value of 413 Kuwaiti fils per share. Furthermore, stc boasts a strong financial solvency position, considered to be amongst the best in comparison to telecom companies in the Middle East. Furthermore, stc’s customer base stood at 1.72 mn customer at the end of June 2020”.
Corporate Social Responsibility
Alharbi added, “The first half of 2020 witnessed launching a number of corporate social responsibility initiatives, including the “Far yet close” campaign in support of the preventive measures taken by the government concerning the Kuwaiti society’s health, safety and awareness. stc has also worked with some government agencies and medical companies to prevent the infectious diseases through distributing facemasks, sanitizers and awareness leaflets to all the airport’s staff as well as departing and returning passengers.
In one of its most important initiatives, stc collaborated with the Communication & Information Technology Regulatory Authority (CITRA) in a series of programs that aimed to alleviate the Kuwaiti society during the crisis, in line the company’s corporate social responsibility (CSR) framework. The initiatives were embodied with providing customers with free unlimited local calls to all operators, in addition to free 5GB daily data usage for a one-month period. stc also collaborated with Kuwait Airways and the Ministry of Health, to greet the returning citizens, where it distributed 25,000 free prepaid lines with internet bundles and free local calls”.
Safety measures and procedures
Alharbi concluded: At the onset of the crisis, the company established a Committee to deal with the crisis through activating the Business Continuity Plan and adopting new initiatives as imposed by the pandemic crisis and the national measures taken to combat the virus outbreak. Through this Committee, the company is mandated by all its sectors to carry out detailed plans for its continuity and to monitor the logistics required to ensure the business as well as services continuity in addition to minimizing the economic impact of the economic crisis on stc’s business while ensuring the safety of its employees and customers.
stc also undertakes preventive precautionary measures and procedures to avoid outbreaks of contagious diseases, in accordance with the health guidelines and instructions provided by the Ministry of Health, in addition to sanitizing all facilities within the company and branches as well as installing sanitizing stations in the company’s departments and elevators. stc also distributes face masks, gloves and sanitizers to all employees within the Company’s while distributing awareness leaflets and sending emails to its employees pertaining the health and safety precautions.As for the branches, stc enforced various preventive measures during working hours throughout the full and partial lockdown periods in accordance with the Government’s plan to gradually return to the normal life in Kuwait. Hence, the Company adopted the highest safety standards and instilled it into the culture of performance among stc’s staff to continue offering high quality services while protecting its customers and employees. Installing thermal cameras, putting preventive intervals, distributing sanitizers, gloves and facemasks in all stc’s branches in addition adhering to the social distancing protocols and health regulations were the key measures taken by the company to combat the pandemic. To ensure consistent safety measures, contracts were signed with specialized companies to ensure the continuous sterilization of all branches, machines, and workplaces, coupled with awareness posters and ongoing training for employees to maintain effective preventive measures”.