solutions 9M 2024 profit rises to SAR 1.27B; Q3 at SAR 463M
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Arabian Internet and Communication Services Co. (solutions) posted a net profit of SAR 1.27 billion for the first nine months of 2024, up from SAR 1.03 billion a year earlier.
Financials (M)
| Item | 9m 2023 | 9m 2024 | Change |
|---|---|---|---|
| Revenues | 8,172.20 | 8,333.28 | 2.0 % |
| Gross Income | 2,133.51 | 2,044.59 | (4.2 %) |
| Operating Income | 1,182.66 | 1,255.03 | 6.1 % |
| Net Income | 1,030.14 | 1,269.63 | 23.2 % |
| Average Shares | 120.00 | 120.00 | - |
| EPS (Riyals) | 8.58 | 10.58 | 23.2 % |
The annual profit hike came as the topline surged by 2% year-on-year (YoY) during the nine-month period. This was due to the revenue increase in both managed IT services and operational services by 9.8% and digital services by 5.5%, despite a 3.4% slip in core ICT services.
Moreover, operating expenses (opex) shrank by SAR 162 million in 9M 2024. This was driven by the SAR 25 million drop in general and administrative expenses, with selling and distribution expenses also down by SAR 137 million during the same period.
The nine-month earnings before interest, taxes, zakat, depreciation and amortization (EBITDA) advanced by 5.1% to SAR 1.46 billion in the first nine months of the year, against SAR 1.39 billion for the same period last year.
Zakat and tax expenses, in addition, contracted by SAR 165 million during the current period, mainly due to the reversal of Zakat provisions related to previous periods after the completion of the Zakat, Tax and Customs Authority (ZATCA) assessment.
Current Quarter Comparison (M)
| Item | Q3 2023 | Q3 2024 | Change |
|---|---|---|---|
| Revenues | 2,794.64 | 2,753.16 | (1.5 %) |
| Gross Income | 795.69 | 729.25 | (8.3 %) |
| Operating Income | 438.44 | 485.31 | 10.7 % |
| Net Income | 386.65 | 463.50 | 19.9 % |
| Average Shares | 120.00 | 120.00 | - |
| EPS (Riyals) | 3.22 | 3.86 | 19.9 % |
The third-quarter net earnings jumped 20% to SAR 463 million, from SAR 386.6 million in Q3 2023, although revenues dropped 1.5% YoY by the end of September 2024.
This came as opex plunged by SAR 113 million during the three-month period, despite the SAR 67 million pullback in gross profit.
On a quarterly basis, net profit grew by 2.3% from SAR 452.7 million in Q2 2024, thanks to Zakat and tax expenses narrowing by SAR 53 million in the third quarter of the year.
Total shareholders’ equity, after minority interest, advanced to SAR 3.68 billion as of Sept. 30, 2024, compared with SAR 3.17 billion a year earlier.
Financial results (Million)
| Period | Revenues | Change | Gross Income | Change | Operating Income | Change |
|---|---|---|---|---|---|---|
| Q1 2024 | 2,808.65 | 4.9 % | 619.46 | 2.2 % | 370.20 | 3.7 % |
| Q2 2024 | 2,771.47 | 2.6 % | 695.88 | (4.9 %) | 399.53 | 3.2 % |
| Q3 2024 | 2,753.16 | (1.5 %) | 729.25 | (8.3 %) | 485.31 | 10.7 % |
Profit Performance (Million)
| Period | Net Income | Change | EPS(Riyal) | Extraordinary Income/Expense | Net Profit Before Unusual Items | EPS Before XO Items |
|---|---|---|---|---|---|---|
| Q1 2024 | 353.34 | 16.3 % | 2.94 | 30.80 | 322.54 | 2.69 |
| Q2 2024 | 452.79 | 33.3 % | 3.77 | 68.30 | 384.49 | 3.20 |
| Q3 2024 | 463.50 | 19.9 % | 3.86 | 73.10 | 390.40 | 3.25 |
Profitability
| Period | Gross Margin | OIBDA Margin | Net Margin Before Unusual Items |
|---|---|---|---|
| Q1 2024 | 23.37 % | 15.13 % | 10.84 % |
| Q2 2024 | 22.90 % | 15.15 % | 11.17 % |
| Q3 2024 | 22.40 % | 15.53 % | 11.24 % |
Per Share Data (Riyal)
| Period | Shares Outstanding (M) | EPS (Riyal) | Adjusted EPS (Riyal) | Book Value (BV) |
|---|---|---|---|---|
| Q1 2024 | 120.00 | 10.35 | 10.09 | 29.37 |
| Q2 2024 | 120.00 | 11.29 | 10.46 | 27.03 |
| Q3 2024 | 120.00 | 11.93 | 10.50 | 30.69 |
Multiple Ratios (End of Period Price)
| Period | P/E | Adjusted P/E | Price/book |
|---|---|---|---|
| Q1 2024 | 36.72 | 37.66 | 12.94 |
| Q2 2024 | 25.86 | 27.91 | 10.80 |
| Q3 2024 | 23.64 | 26.87 | 9.19 |
Business Segments (Million)
Q3 2024
| Period | Core ICT Services | IT Managed and Operational Services | Digital Services |
|---|---|---|---|
| Q1 2024 | 1,584.25 | 778.02 | 446.38 |
| Q2 2024 | 1,304.27 | 983.04 | 484.16 |
| Q3 2024 | 1,373.12 | 870.66 | 509.38 |
Analysts Estimates (Million)
| Item | Q3 2024 (e) | Q3 2024 (a) | Change |
|---|---|---|---|
| Average | 398.39 | 463.50 | 16.34 % |
Estimates vs Actual (Million)
| Item | Q3 2024 (e) | Q3 2024 (a) | Change |
|---|---|---|---|
| U-Capital | 452.90 | 463.50 | 2.3 % |
| Jefferies | 415.00 | 463.50 | 11.7 % |
| SNB Capital | 411.00 | 463.50 | 12.8 % |
| Sico | 409.00 | 463.50 | 13.3 % |
| Al Rajhi Capital | 407.00 | 463.50 | 13.9 % |
| AlJazira Capital | 400.80 | 463.50 | 15.6 % |
| Goldman Sachs | 397.20 | 463.50 | 16.7 % |
| Riyad Capital | 390.00 | 463.50 | 18.8 % |
| YAQEEN | 367.00 | 463.50 | 26.3 % |
| United Securities Company | 334.00 | 463.50 | 38.8 % |
| Current | |
| Market Cap (M Riyal) | 32,136.00 |
| Enterprise Value (EV) (M) | 30,121.25 |
| 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) | 25.52 |
| P/E (TTM) | 22.45 |
| Price/book | 8.73 |
| Return on Average Assets (%) (TTM) | 13.1 |
| Return on Average Equity (%) (TTM) | 41.7 |
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