STC’s business units record distinct revenue growth in Q1 2020, says CEO

STC’s business units reported distinct growth in revenue during the first quarter of the year, despite the fallout of the COVID-19, Nasser Sulaiman Al Nasser, the group’s CEO, told Argaam in an exclusive on Tuesday.

STC is currently working on limiting the negative impacts of the coronavirus outbreak. A comprehensive study is being conducted on the potential impacts on STC’s operations if the pandemic lasts for a long time.

However, the coronavirus pandemic will weigh negatively on the economic sectors, mainly SMEs, and the global revenue and international roaming amid travel restrictions, Al Nasser said.

Here’s the full interview with Al Nasser:

Q: STC reported net profit of SAR 2.91 billion for the first quarter of 2020. How do you see the group’s financial results?

A: Despite the coronavirus (COVID-19) pandemic, STC was able to grow its top line by 4.1%. The group’s business units recorded distinct revenue growth in the current quarter, compared Q1 2019. The growth was backed by the enterprise business and wholebusiness units. Moreover, the consumer business unit’s revenue increased on a rise in fiber optic subscribers by 23% and data revenue by 15.5%.

Q: What are the latest updates about STC’s acquisition of Vodafone Egypt?

A: STC extended the non-binding memorandum of understanding (MoU) to acquire 55% stake in Vodafone Group’s Egyptian business for additional 90 days due to the logistics challenges caused by the COVID-19 pandemic. Both parties need more time to complete the required procedures, including due diligence. New developments will be announced in due course.

Q: How do you assess STC Pay’s performance and profitability in Q1 2020?

A: In the first year of operation, STC Pay’s subscriber base hit over 2 million, a positive indicator in the growth stage. In the first quarter of the year, the value of cash transactions equaled the value achieved throughout 2019. This reflects client confidence in STC Pay’s services.

We expect STC Pay to report growth in the near term, in line with the Saudi Vision 2030, which aims to develop the financial sector.

Q: What about the COVID-19 impacts on the group’s operations?

A: STC is currently working on limiting the negative impacts of the coronavirus outbreak. A comprehensive study is being conducted on the potential impacts on STC’s operations if the pandemic lasts for a long time.

However, the coronavirus pandemic will weigh negatively on the economic sectors, mainly SMEs, and the global revenue and international roaming amid travel restrictions.

Any material impact will be announced later on.

Q: STC received SAR 430 million from Careem sale in the first quarter. Can you please give us more details about the other proceeds it will receive? And also, when the relevant financial impact will show on STC?

A: STC’s share from selling its direct investment in the Dubai-based ride hailing app, stood at $247 million. STC will be receive these proceeds partly in cash and partly in Uber’s convertible bonds. The deal was completed on Jan. 2, 2020, with retention of the equivalent of 25% of its value. The profit was recognized in the first quarter, excluding the retained value. The sale details will be available in STC’s financial statements, which will be issued soon.