Net profit rises to KD 27.5 mn, EBITDA reaches 27.7% during first nine months of 2020
KUWAIT CITY, Oct 27: 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 nine month period ended 30 September 2020.
On this occasion, Dr. Mahmoud Ahmad Abdulrahman – stc’s Chairman, stated: During the third quarter of the year 2020, the telecommunications sector witnessed a gradual recovery concerning the operational and financial results throughout the continuous negative economic consequences of the current COVID-19 crisis, which has heavily affected numerous sectors worldwide. Since the onset of the crisis, stc has been always keen on supporting the Kuwaiti society by launching a number of corporate social responsibility initiatives, in support of the preventive measures taken by the government. stc has also worked with some government agencies and medical companies to prevent the infectious diseases in addition to undertaking several 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. stc has also adopted the highest safety standards and instilled it into the culture of performance among its staff to continue offering high quality services while protecting its customers and employee. In addition to being a pioneer in providing innovative integrated advanced digital solutions and technological advances for both individuals and enterprises throughout the COVID-19 outbreak, stc was able to achieve these results through adopting a flexible operating model, in addition to being flexible in implementing the company’s digital transformation strategy and providing advanced technical solutions in line with the government outlook with regard to social distancing for individual and enterprise segments. Through capitalizing on the 5G network to deliver a range of digital services, which have become a significant part of the Kuwaiti Community’s daily activities, stc was able to satisfy the high demand for broadband high-speed networks following the latest governmental decisions of pursuing the current Academic Year using the online platforms in addition to the corporates’ incumbent for the online cloud and digital solutions”.
Commenting on stc’s financial results for the nine months period, Dr. Abdulrahman, commented: stc’s total revenues stood at KD 209.0 mn for the nine-month period ended 30 September 2020 in comparison to KD 215.6 mn for the same period last year. On the other hand, EBITDA reached KD 57.9 mn during the first nine-month period of 2020 compared to KD 60.1 mn during the same period in 2019. stc’s EBITDA margin reached 27.7% during the 9M-2020 period compared to 27.9% in 2019. As a result, stc recorded a net profit KD 27.5 mn (earnings per share of 55 fils) with a profit margin of 13.1% for the period.
Dr. Abdulrahman added: stc’s financial results for the first nine-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 approx. 35%. With the ongoing repercussions and challenges we are facing due to the COVID-19 crisis, the 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. Commenting on the quarterly results for the three months period ended 30 September 2020.
Eng. Maziad Bin Nasser Alharbi – stc’s Chief Executive Officer, added: “The Company’s financial results have witnessed remarkable growth in the third quarter compared to the second quarter of 2020 as the revenue recorded KD 72.6 million in Q3-2020 compared to KD 64.2 million in Q2- 2020 representing a growth of 13%. While EBITDA grew by 16.3% to reach, KD 22.0 million in Q3-2020 compared to KD 18.9 million in Q2-2020. As a result, the net profit for the same period increased by 23.7% to reach KD 11.6 million compared to 9.3 million. 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.
Considering the Company’s financial position as of 30 September 2020, total assets reached KD 411.9 mn, while total shareholders’ equity reached KD 217.8 mn, with a book value of 436 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 1.84 mn customer at the end of September 2020.
Alharbi added: the third quarter of 2020 witnessed the launch of a series of promotions and services that can benefit and add value to the user experience of both individuals and corporates. During the quarter, we launched the dedicated backup access solution in a step to build on the series of offerings introduced by the Company to its enterprise customers. The new solution aimed at preventing any disruptions in primary internet connectivity that may lead to interruptions in business functions, while keeping in mind the current challenges companies and SMEs are facing in their return to normal business operations.
Upon subscribing to the limited time and exclusive promotions, new customers and those renewing their subscriptions received several complimentary gifts and enjoyed benefits that range from 500 free local minutes to double the GBs, reaching up to 100 GB on the largest 5G network in Kuwait.
Additionally, stc was the first operator in the Middle East to launch unlimited 5G roaming for all its postpaid, prepaid and enterprise customers across all GCC countries. Following the chain of exclusive and innovative offers released by the Company, the innovative and ground-breaking service could be added to any of stc’s packages for both existing and new customers. By subscribing to the roaming service, customers were able to enjoy the telecom operator’s ultra-fast 5G speeds throughout all GCC countries without any price increases to offered roaming packages. stc also announced the launch TURBONET, a product developed with the latest state-of-the-art technology capable of delivering fixed internet speeds. TURBONET was available to customers with monthly plans, in addition to a complete mesh Wifisolution and outdoor router that guarantees maximum home coverage at no additional cost. By offering its range of “Always ON” postpaid plans, packaged with new unique benefits designed to meet customers’ connectivity requirements, customers were able to unlock the new-to-market features by subscribing to one of stc’s plans.
The plans featured the highly convenient Always ON service that permits users to always remain connected to the internet, as well as benefits ranging from telecom to premium digital services. Furthermore, in order to strengthen its 5G network and provide better solutions to its customers, stc expanded its 5G network on a 2.1 GHz frequency band, the first of its kind in Kuwait. The deployment of the network not only improves the overall user experience for customers, but it also prepares for the exploration and development of 5G vertical industry applications.