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Investing.com - Saudi Telecom (BCBA:TECO2m) Company (TADAWUL:7010) reported second-quarter revenue of SAR19,451 million, falling 1.1% below consensus estimates, with particularly weak performance in its Enterprise Business Unit and Channels segments.
The telecom giant posted year-over-year revenue growth of 2.6% in the second quarter, only marginally improving from 1.6% in the first quarter of 2025 and lagging behind competitors Mobily (8.1%) and Zain KSA (4.0%). The Commercial segment grew 3.9% year-over-year despite a mobile subscriber net loss of 0.04 million, while the Enterprise Business Unit declined 3.9% compared to 9.7% growth in the previous quarter.
STC’s EBITDA reached SAR6,168 million, 1.1% below consensus estimates, with a margin of 31.7% that was in line with expectations and up 140 basis points year-over-year. Gross profit came in at SAR9,560 million, 1.4% above consensus, with gross profit margin at 49.1%, exceeding consensus by 120 basis points.
The company reported net income of SAR3,823 million, 10.1% above consensus and up 15.7% year-over-year, though this included SAR82 million in net other gains and a SAR216 million Zakat tax income. Adjusting for these items, STC’s clean net income was estimated at SAR3,246 million, down 1.8% year-over-year and 6.5% below consensus, driven by the EBITDA miss and lower-than-expected financial income.
Free cash flow to the firm was SAR0.8 billion, above the SAR0.5 billion in the first quarter but significantly below the SAR3.7 billion in the second quarter of 2024, with first-half FCFF down 64% year-over-year. The company announced a quarterly dividend of SAR0.55 per share in line with its policy, while its net debt position stood at approximately SAR1.8 billion, representing 0.1 times last twelve months’ EBITDA.
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