Staff bonus payment impacts STC’s Q1 net profit

STC today announced its consolidated financial results for the period ending March 31, 2011, with first quarter revenues rising to SAR 13.08 billion (US$3.49 billion), up four per cent year-on-year.

Operating income for the quarter reached SAR2.67 billion, up 13 per cent year-on-year, while EBITDA for the period reached SAR4.81 billion, an increase of eight per cent.

The telco said the increase in revenues is attributed to the enhancement of operational efficiencies of the group’s subsidiaries and affiliate companies. However, net income during the quarter amounted to SAR 1.57 billion, down 11 per cent year-on-year. STC attributed the net income decrease to the two-month salary payment to all employees, which amounted to SAR 375 million. The payment was made to all employees as a gesture to follow the initiative of the Honourable Royal Decree.

STC states that without counting the two-month salary, net profits for the quarter would have been SAR 1.95 billion, representing a 10 per cent increase compared to the corresponding period last year.

The percentage contribution of international operations revenue increased to 34 per cent compared to 31 per cent a year earlier.

The STC board of directors also approved dividends of SAR 1 billion to shareholders.