Saudi Telecom Co. — Earnings Release 2014

Feb 23, 2015

Saudi Telecom announces the annual consolidated financial results for the period ending on 31-12-2014

7010 · 23/02/2015 16:40:59 · Announcement #37280 · View on Saudi Exchange

Saudi Telecom announces the annual consolidated financial results for the period ending on 31-12-2014

Element	Current year	Previous year	% Change
Net profit (loss)	10,959	9,897	10.73
Earning or loss per share, Riyals	5.48	4.95	-
Gross profit (loss)	28,156	27,413	2.71
Operational profit (loss)	11,632	10,989	5.85

*All figures are in (Millions) Saudi Arabia, Riyals

Element	EXPLAINATION
Reasons of annual financial results	The Net Profit for 2014 increased by SR 1,062 (10.7%) compared to the previous year, this increase is attributed to the following: 1) The SR 742m increase in gross profit (2.7%) compared to the previous year, as a result to the 0.5% increase in revenues from services and the 2.9% decrease in cost of services compared to the previous year. 2) The SR 99m increase in operating expenses (0.6%) for 2014 compared to the previous year, the details as follow: * The decrease in selling & marketing expenses during the year by SR 90m (1.5%) compared to the previous year. * The increase in general & administrative expenses during the year by SR 242m (8.3%) compared to last year. * The increase in depreciation and amortization during year by SR 652m (10%) compared to last year. * The booking of a onetime, nonrecurring and noncash charge of SR 399 million provisions from impairment related to STC investments in Oger tel ltd. Resulting from Cell C (one of Oger tel ltd. Subsidiaries). The comparable numbers for the previous year (2013) includes, a noncash, nonrecurring charge of SR 1,104m resulting from fair valuation of STC investments in Asia Aircel of SR 500m and the reclassification of Axis as assets held for sale during Q2, 2013, the group re measured the net assets related to the investment at fair value. In Q2 2013, we had booked a noncash charge of SR 604m from losses resulting from assets held for sale related to Axis, Indonesia. 3) The SR 1,072m increase in Other income and expenses, net for 2014 compared to the previous year, and the main reasons are attributed to: * The comparable numbers for the previous year (2013) includes, losses of SR 598m resulting from consolidating Axis, Indonesia which was not consolidated during 2014 as a result to selling Axis as announced previously. * The SR 679m (72%) decrease in Losses from investments accounted for under equity method compared to the previous year, as a result of STC group not consolidating its investment in Aircel Group using the equity method effective from the second quarter 2013, Which resulted in STC group reversing its share of losses from Aircel Group for the period from 1 April 2013 to 30 September 2013 amounting to SR 795m during the 4th quarter 2013 as announced previously. * The booking of SR 595m gains resulting from the compensation for the company land and buildings erected thereon which is located in Al Faisaliah area in Riyadh, which was booked during the 4th quarter of 2014. 4) The SR 544m increase in the provision for Zakat & Tax during the year compared to the previous year.
Reclassifications in annual financial results	Certain comparatives figures for the year ending at 31 December 2013 have been reclassified to conform with the presentation used for the year ending at 31 December 2014.

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