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Company posts KD 8.0mn net profit, customer base reaches 1.8mn at end of March 2021
KUWAIT CITY, April 28: 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 three-month period ended 31 March 2021.
On this occasion, Dr. Mahmoud Ahmad Abdulrahman – stc’s Chairman, stated: “stc has demonstrated its resilience and viability in providing the best services and products to the individual and business sectors on a continuous basis, throughout the potential risks and critical economic conditions resulted from the continued global spread of COVID-19 pandemic. Accordingly, as the negative effects of COVID-19 continue to significantly hit most of the vital sectors worldwide, stc is constantly keen on developing precautionary plans that enable the company to maintain its operations during the curfew and lockdown periods in order to ensure service delivery and customer satisfaction. In line with the industry global trends, market changes and the company’s corporate strategy, stc updated its strategic framework to enhance its position as a leader in the digital arena. Over the past couple of years, stc’s corporate strategy has enabled the company to optimize its operations, invest in developing the largest 5G network in Kuwait and enhance its digital channels to provide its customers with an unrivalled experience”.
Commenting on the financial results for the three months period ended 31 March 2021, Dr. Abdulrahman said: “stc’s revenues reached KD 69.8 mn in the first quarter of 2021 compared to KD 72.2 mn during the same period of 2020. The overall drop in revenues for Q1-2021 is contributed to the continuing repercussions of the current crisis, which continues to strain the operational and financial results of the Telecommunications sector, in particular the individual sector, as a result of the continued partial curfew imposed in Kuwait due to COVID-19 pandemic. Furthermore, the continued imposed restrictions on the airport and the suspension of flights have also contributed to the drop in stc’s revenues due to the decline in the number of residents in the State of Kuwait over the past year, resulting in a decline in the demand for the individual sector in addition to the significant and almost total decline in the roaming services. Despite the decline in revenues, stc recorded a growth in EBITDA by 10.9% and net profit by 22.6% in the first three months of 2021 compared to the same period in 2020.
Considering the Company’s financial position as of 31 March 2021, total assets reached KD 383.0 mn, while total shareholders’ equity reached KD 200.2 mn, with a book value of 401 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 1.8 mn customer at the end of March 2021”.
Dr. Abdulrahman noted, “stc’s financial results for the first three-month period of 2021 demonstrates its 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 significant increase in Company’s financial results is attributed to the decline in stc’s bad debt and its implementation of 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”.
In regards to the Company’s financial results, engineer Maziad Alharbi – Chief Executive Officer of stc, said: “stc was able to achieve these results due to the great efforts provided and the dedication of its employees in addition to being flexible in implementing the company’s digital transformation strategy and providing integrated advanced technical solutions that serve the Kuwaiti government’s outlook with regards to the social distancing for the individual and enterprise segments. 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. Accordingly, stc proved its ability to overcome potential unprecedented challenges due to the great efforts provided and the dedication of its employees and their determination to provide services to customers with the same quality standards through the digital platforms”.
Alharbi added, “stc’s EBITDA increased by 10.9% in the first three months of 2021 to reach KD 18.9 mn compared to KD 17.0 mn during the same period of 2020. EBITDA margin reached 27% in Q1-2021 compared to 24% in Q1-2020. Accordingly, stc reported an increase in the net profit by 22.6% to reach KD 8.0 mn (earnings per share of 16 fils) with a profit margin of 11% compared to KD 6.5 mn (earnings per share of 13 fils) with a profit margin of 9% in 2020.
stc demonstrated its ability to overcome the potential challenges and risks with the ability to keep up its operations and open its doors to serve its customers in such circumstances. Whereby, in order to maintain its operations and continue delivering uninterrupted services to customers, stc carried on its comprehensive business continuity plan. Earlier in the year, the Company was certified with the latest version of the ISO Certification in Business Continuity (ISO 22301:2019) after completing a vigorous auditing process performed by TopCertifier. The certification comes as a testament to the diligent approach taken by stc to implement protocols and guidelines across all business-related aspects during the pandemic.
It is worth noting that the first quarter of 2021 carried extraordinary events 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 (MNVO) 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.In addition, solutions by stc, the Company’s specialized business arm, launched its ultimate solution in cyber security and protection, “Shield”. The pioneering service ensures online protection for businesses by identifying risks in possible data breaches, offering 360 degrees protection, and assessing critical assets to enable worry-free environments for businesses to thrive digitally”.