solutions 9M 2023 profit grows 20% to SAR 1.03 bln; Q3 at SAR 387 mln
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Arabian Internet and Communication Services Co. (solutions) posted a 20% rise in net profit to SAR 1.03 billion in the first nine months of 2023, compared to SAR 856 million a year earlier.
Financials (M)
| Item | 9m 2022 | 9m 2023 | Change |
|---|---|---|---|
| Revenues | 6,367.21 | 8,172.20 | 28.3 % |
| Gross Income | 1,497.54 | 2,133.51 | 42.5 % |
| Operating Income | 919.85 | 1,182.66 | 28.6 % |
| Net Income | 855.89 | 1,030.14 | 20.4 % |
| Average Shares | 120.00 | 120.00 | - |
| EPS (Riyals) | 7.13 | 8.58 | 20.4 % |
The higher profit was spurred by better revenues, which were primarily driven by a rise of 29.5% YoY in core ICT services. IT Managed and operational services’ revenues leapt 40.8% YoY, followed by digital services (8.4%).
In the three-month period, net profit climbed 29% to SAR 387 million from SAR 299.89 million in Q3 2022.
On a sequential basis, solutions’ bottom line grew 13.9% from SAR 339.69 million in Q2 2023.
Current Quarter Comparison (M)
| Item | Q3 2022 | Q3 2023 | Change |
|---|---|---|---|
| Revenues | 2,039.15 | 2,794.64 | 37.0 % |
| Gross Income | 498.97 | 795.69 | 59.5 % |
| Operating Income | 313.38 | 438.44 | 39.9 % |
| Net Income | 299.89 | 386.65 | 28.9 % |
| Average Shares | 120.00 | 120.00 | - |
| EPS (Riyals) | 2.50 | 3.22 | 28.9 % |
Shareholders’ equity, before minority interest, came in at SAR 3.17 billion as of Sept. 30, 2023, up from SAR 2.67 billion a year earlier
Financial results (Million)
| Period | Revenues | Change | Gross Income | Change | Operating Income | Change |
|---|---|---|---|---|---|---|
| Q1 2023 | 2,676.27 | 19.3 % | 606.16 | 22.8 % | 356.97 | 14.1 % |
| Q2 2023 | 2,701.29 | 29.5 % | 731.67 | 44.9 % | 387.25 | 31.9 % |
| Q3 2023 | 2,794.64 | 37.0 % | 795.69 | 59.5 % | 438.44 | 39.9 % |
Profit Performance (Million)
| Period | Net Income | Change | EPS(Riyal) | Extraordinary Income/Expense | Net Profit Before Unusual Items | EPS Before XO Items |
|---|---|---|---|---|---|---|
| Q1 2023 | 303.81 | 7.4 % | 2.53 | - | 303.81 | 2.53 |
| Q2 2023 | 339.69 | 24.4 % | 2.83 | - | 339.69 | 2.83 |
| Q3 2023 | 386.65 | 28.9 % | 3.22 | - | 386.65 | 3.22 |
Profitability
| Period | Gross Margin | OIBDA Margin | Net Margin Before Unusual Items |
|---|---|---|---|
| Q1 2023 | 22.99 % | 15.76 % | 11.92 % |
| Q2 2023 | 23.85 % | 15.85 % | 11.85 % |
| Q3 2023 | 24.95 % | 16.12 % | 11.82 % |
Per Share Data (Riyal)
| Period | Shares Outstanding (M) | EPS (Riyal) | Adjusted EPS (Riyal) | Book Value (BV) |
|---|---|---|---|---|
| Q1 2023 | 120.00 | 8.95 | 9.17 | 25.13 |
| Q2 2023 | 120.00 | 9.50 | 9.73 | 23.23 |
| Q3 2023 | 120.00 | 10.23 | 10.45 | 26.46 |
Multiple Ratios (End of Period Price)
| Period | P/E | Adjusted P/E | Price/book |
|---|---|---|---|
| Q1 2023 | 27.80 | 27.12 | 9.90 |
| Q2 2023 | 33.95 | 33.16 | 13.89 |
| Q3 2023 | 31.25 | 30.58 | 12.08 |
Business Segments (Million)
Q3 2023
| Period | Core ICT Services | IT Managed and Operational Services | Digital Services |
|---|---|---|---|
| Q1 2023 | 1,558.93 | 674.42 | 442.92 |
| Q2 2023 | 1,377.28 | 825.27 | 498.74 |
| Q3 2023 | 1,474.47 | 896.60 | 423.57 |
Analysts Estimates (Million)
| Item | Q3 2023 (e) | Q3 2023 (a) | Change |
|---|---|---|---|
| Average | 342.17 | 386.65 | 13.00 % |
Estimates vs Actual (Million)
| Item | Q3 2023 (e) | Q3 2023 (a) | Change |
|---|---|---|---|
| Goldman Sachs | 370.00 | 386.65 | 4.5 % |
| Bank of America | 361.00 | 386.65 | 7.1 % |
| Riyad Capital | 349.00 | 386.65 | 10.8 % |
| HSBC | 347.00 | 386.65 | 11.4 % |
| Al Rajhi Capital | 345.00 | 386.65 | 12.1 % |
| SNB Capital | 345.00 | 386.65 | 12.1 % |
| Arqaam Capital | 344.00 | 386.65 | 12.4 % |
| Citi Bank Group | 335.00 | 386.65 | 15.4 % |
| U-Capital | 330.70 | 386.65 | 16.9 % |
| Morgan Stanley International | 324.80 | 386.65 | 19.0 % |
| Sico | 312.40 | 386.65 | 23.8 % |
| Current | |
| Market Cap (M Riyal) | 31,944.00 |
| Enterprise Value (EV) (M) | 29,929.25 |
| Shares Outstanding ((M)) | 120.00 |
| EPS ( Riyal) (TTM) | 11.93 |
| Book Value (BV) ( Riyal) | 30.69 |
| Par Value ( Riyal) | 10.00 |
| Adjusted P/E (Last12) | 25.36 |
| P/E (TTM) | 22.31 |
| Price/book | 8.67 |
| Return on Average Assets (%) (TTM) | 13.1 |
| Return on Average Equity (%) (TTM) | 41.7 |
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