GO ‘fastest-growing’ in Saudi market; capital hike to enhance growth: CEO

Yahya Al-Mansour, CEO of Etihad Atheeb

Etihad Atheeb Telecommunication Co. (GO) will use the capital increase proceeds to implement its strategy,  enhance its financial position and market competitiveness, CEO Yahya Al-Mansour told Argaam. 

He underpinned GO’s need to increase capital to sustain growth, develop services and improve customer experience, pointing to the company’s improved results over the previous period, as it became one of the fastest-growing market players in Saudi Arabia and the GCC region.

Below are the details of the interview:

Q: Why does GO need a capital hike despite making profits?

A: We believe the company's profit is increasing rapidly. In order to effectively implement the company’s strategy and achieve faster growth, capital should be increased to maximize shareholders’ equity.

We have ambitious development plans to become more competitive in the promising Saudi telecommunications market. To implement these plans and strategies, the company needs to invest in its infrastructure, launch new products, expand its capacity to serve customers better and improve the customer experience to sustain revenue and profitability growth, which will positively reflect on shareholders’ equity.

Q: The company has repeatedly raised and cut capital before. What is different about the current capital hike?

A: The current executive management has been working to address challenges and improve performance since October 2020 through various initiatives, including stock trading resumption, deleveraging and pursuing profitability.

Etihad Atheeb has reached an unprecedented and outstanding financial position, as it generated operating revenue and reported retained earnings for the first time since inception. Additionally, the company’s profit and revenue doubled over the past two years and are improving. This confirms that the capital increase will support growth. Most of the proceeds will be mainly used to finance the transformation strategy and investments to strengthen the company's financial and operational positions.

Q: What is the main reason behind turning to profitability over the last two years?

A: The company reported stellar results over the last two years as its highly qualified staff implemented a transformation strategy. The strategy included the network upgrade, innovative products and services, in addition to the 5G rollout for the business sector. These successive efforts in implementing the strategy led to increasing business and retail revenues and winning large government projects, in addition to improving the company's financial position through cost-optimization and deleveraging.

Q: How will the company use the capital increase proceeds?

A:  As indicated in the prospectus, 64% of the proceeds will be used to implement the transformation strategy projects and develop the company's networks and infrastructure. This will give GO ample room to access new markets, new sectors and enhance its competitive position in the Saudi telecommunications sector. The company will further use 36% of the proceeds to pay off some of its outstanding obligations.

Below is the timeframe for the proceeds’ utilization:

Q: How will the capital increase impact the company’s strategy?

A: The capital hike will support implementing innovative projects arising from the transformation strategy. This will enable the company to fulfill customer aspirations and enhance its competitive position to pursue revenue and profit growth.

In addition, I would like to indicate that the value of contracts concluded with a number of entities exceeded SAR 284 million by the end of the first quarter of 2023, with SAR 59 million work already completed. The backlog, which will be completed over the next six years, is valued at SAR 225 million.

Q: What are your expectations for the company's performance during 2024?

A: The company will likely continue pursuing growth in terms of financial and operational performance and will constantly sustain profitability to fulfill shareholder and customer aspirations.