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NET PROFIT HITS KD 23.8MN, TOTAL ASSETS AT KD 394MN
EBITDA reaches KD 57.0mn; customer base at 1.9mn customers
KUWAIT CITY, Oct 30: 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 ninemonth period ended 30 September 2021.
On this occasion, Dr. Mahmoud Ahmad Abdulrahman – stc’s Chairman, stated: “Driven by the global direction towards digitization and the corporate digitalization outlook, stc’s refreshed strategy had a significant role in enabling the digital transformation in Kuwait. Since the onset of the COVID-19 pandemic, the urgent need for a local digital society has been met by allowing businesses, educational institutions and individuals to remain connected through enhancing stc’s network infrastructure in addition to providing online platforms and a variety of the finest and latest comprehensive digital services and products to the individual and business sectors to strengthen the customer experience. The continuous socio-economic changes and the increased demand on digital tools, products and services necessary to continue the daily business operations has prompted stc to enhance its corporate strategy as well as its risk management plans which aim at enabling the company to continuously carry out its operations during the various circumstances to ensure continuity of delivering the best quality and customer satisfaction”.
Commenting on the financial results for the nine months period ended 30 September 2021, Dr. Abdulrahman said: “Despite the slow recovery process impacted by the COVID-19 crisis, stc was able to record an increase in revenues by 2.3% during the first 9 months of 2021 to reach KD 213.8 mn compared to KD 209.0 mn for the same period in the previous year. This increase is mainly attributed to the Company’s resilient performance and the implementation of its fl exible strategy. On the other hand, high marketing and sales costs due to stiff market competition led to a decrease in EBITDA by 1.6% during the first nine months of 2021 compared to the same period of the previous year. The high depreciation associated with investments in the 5G network assets that the company has extensively utilized also had a significant effect, resulting in a 13.4% decrease in net profit during the first nine months of 2021 compared to the same period in the previous year.”
Corporate Social Responsibility
In terms of stc’s corporate social responsibility, Dr. Abdulrahman pointed out that the past year witnessed a number of social activities aimed at supporting the government’s decisions to battle the pandemic after the cabinet eased travel restrictions, allowing vaccinated non-Kuwaiti travelers to return to the country. As part of the Company’s extensive corporate social responsibility, stc launched a series of campaigns and initiatives to assist customers in overcoming the challenges that appeared in light of the unexpected circumstances the country was going through. stc’s CSR program has consistently focused on supporting causes and initiatives that directly impact the Kuwaiti community. This has provided the Company with the opportunity to engage with communities across all levels of society, primarily focusing on the areas of health, environment, entrepreneurship, sports, and education. Based on its key values, the Company has set a long-standing commitment to consistently implement the initiatives under its CSR program, whether it is through annual agenda, sponsorships, or cause-driven campaigns.
With regards to Company’s financial results, Engineer Maziad Alharbi – stc’s Chief Executive Officer, commented: “stc was able to enhance its operating performance due to the world-wide fundamental changes imposed by the COVID-19 crisis, which increased the demand for the traditional communication and digital services. Whereby, stc has been able to sustain the revenue growth achieved throughout this year by leveraging on the 5G network’s capabilities and efficiency. With the recent implementation of the returning to normal life process in Kuwait, stc’s dedicated team has proved its professionalism, enthusiasm and devotion towards accelerating the operational performance of stc’s B2B and B2C segments.
This was represented in providing integrated technical solutions that serve the latest corporate and individual needs for the digital tools that became an integral part of our daily life. On the other hand, the increased demand on the ICT sector resulted from current global trend towards the use of IT systems and solutions, IoT, cloud computing, big data, storage as well as security services amplified the competition in the telecommunication and ICT industries. In this regard, stc is currently keen on enhancing its IT infrastructure further by hiring the top expertise in the ICT sector besides harnessing the business, professional, service delivery and project management capabilities in order to develop new business models that will aid the company to enhance, produce and provide comprehensive enterprise database solutions.
Thus, stc’s updated strategy has refl ected the significant need for providing innovative, scalable and diversified technological and IT communications solutions to support the growing demand for those services in order to enhance stc’s operational and financial performance in future periods”. Alharbi added, “stc’s EBITDA reached KD 57.0 mn during the first nine months of 2021 compared to KD 57.9 mn during the same period of 2020. Whereas, EBITDA margin reached 26.6% in the first nine months of 2021. Accordingly, stc reported net profit of KD 23.8 mn (earnings per share of 48 fils) with a profit margin of 11.1% in the first nine months of 2021. Considering Company’s financial position, total assets reached KD 394.0 mn as of 30 September 2021, while total shareholders’ equity reached KD 216.0 mn, with a book value of 433 Kuwaiti fils per share. 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 1.9 mn customers as of end of September 2021.”
Alharbi noted: “stc’s financial results for the first nine months of 2021 demonstrates company’s ability to open up for new areas of improvements and sustain 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 that are still affecting most of the vital sectors worldwide, the economic situation is impeding the recovery process of corporates’ operational and financial performance. While the company is mainly concerned about adding value to its customers and achieving good returns for its shareholders through adopting a balanced and effective financial policy in relation to the operational and capital expenditure, stc is opt to capitalize on its cost optimization program to achieve better results and enhance its profitability.” The first nine months of 2021 witnessed a number of operational achievements, whereby stc launched a raffl e draw of many prizes for customers who subscribe to new commitment plans and those who renew their current plans through zeed offer. The year witnessed an extraordinary event for stc, whereby, the Company received the approval from the Communication and Information Technology Regulatory Authority’s (CITRA) to launch the first-of-its-kind mobile virtual network operator (MVNO) license to launch Virgin Mobile Kuwait in partnership with Virgin Mobile Middle East & Africa. Virgin Mobile Kuwait will operate using stc’s network, with stc acting as a Host Facilities Based Provider “FBP” with Virgin Mobile Kuwait, offering prepaid plans to users, and making it the first virtual telecom service in the country. Solutions by stc also announced its partnership with Datumcon, a Gulf-based artificial intelligence (AI) and data Science Company, to bring the benefits of AIenabled video analytics to businesses in Kuwait. Additionally, solutions by stc launched a new promotion especially tailored to support small and medium sized enterprises (SMEs) with dedicated data access (DDA) and dedicated internet access (DIA) at competitively low prices. Finally, it is worth mentioning that during the past nine months, the Company announced the launch of its all-new business website featuring a new look and feel, as well as innovative features that complement the unique experience for B2B customers. The new website was specifically designed with the objective of delivering a world-class experience for customers, while meeting their diverse business needs through improved access to a variety of solutions.”