Oct. 30 (Bloomberg) -- Saudi Telecom Co. rose the most in almost five years after quarterly profit at the Persian Gulf’s biggest phone company jumped 73 percent, beating estimates.
Riyadh-based Saudi Telecom advanced 7.4 percent, the steepest gain since November 2008, to 47.7 riyals, at the close in the capital. The stock has climbed 10 percent this month, compared with an increase of 0.5 percent for the benchmark Tadawul All Share Index. Profit for the three months ended Sept. 30 surged to 3.39 billion riyals ($904 million), topping the 1.97 billion-riyal mean estimate of nine analysts on Bloomberg.
An improvement in operation efficiencies lowered service costs and operating expenses, helping boost earnings, the company said in a statement to the bourse yesterday. Saudi Telecom agreed last month to sell PT Axis Telekom Indonesia to PT XL Axiata Tbk., a unit of Malaysia’s largest mobile-phone operator. XL Axiata, a 66.5 percent-owned unit of Axiata Group, said it would settle $865 million of Axis debt.
“It was a very costly venture for STC,” Asim Bukhtiar, a senior analyst at Riyad Capital, said by phone. “There is a bigger story here than their earnings.”
The telecommunications provider booked a non-cash charge of 598 million riyals in the second quarter “from losses resulting from assets held for sale related to Axis Indonesia,” the company said yesterday. Saudi Telecom’s board also approved a dividend of 0.5 riyal per share for the third quarter.
To contact the reporter on this story: Glen Carey in Riyadh at email@example.com
To contact the editor responsible for this story: Andrew J. Barden at firstname.lastname@example.org