Industry Updates

Kuwait Telecommunications Company (stc), a world-class digital leader providing innovative services and platforms to customers and enabling the digital transformation in Kuwait, announced its financial results for the financial year ended 31 December 2021. stc highlights the financial and operational performance in addition to the social initiatives that the company took during the year 2021 amid COVID-19’s difficulties, challenges and negative economic consequences which affected most companies within various sectors.

Commenting on the announcements of these results, Dr. Mahmoud Ahmed Abdulrahman, stc’s Chairman, stated: “2021 was a year full of operational and financial achievements for stc, in spite of the stiff working environment imposed by the COVID-19 crisis on the Kuwaiti telecommunications market, which in turn demonstrated its resilience and flexibility in addressing economic risks. stc has also updated its business model and strategy to meet the continuous and massive growth in the digital communications services. Accordingly, stc is committed to provide integrated technical solutions and corporate database solutions that would enable as well as support the economic and social recovery process of the COVID-19 crisis. This would, in turn, enhance stc’s operational and financial performance, with the aspiration to achieving an outstanding performance in the coming periods”.

He pointed out: "Despite the continuing negative repercussions of the current economic crisis due to the COVID-19 pandemic, which affected most sectors on a global level, we are optimistic about the future of businesses. Therefore, we constantly seek to provide our customers with new and innovative products and services in addition to expanding easy and accessible communication channels that would enable us to provide better and faster services. stc has also greatly ensured providing integrated, advanced and innovative digital as well as technology solutions for both individuals and enterprises. Whereby, stc has been able to achieve these results by adopting a flexible operating model besides being flexible in implementing the company's digital transformation strategy. Not to mention stc’s keenness to provide integrated advanced technical solutions to serve the Kuwaiti government's outlook with regards to the social distancing protocols imposed on the individual and enterprise segments”.

Dr. Abdulrahman commented on stc’s social initiatives since COVID-19’s outbreak: “Since the onset of the pandemic, stc has been fully committed to improving the public health situation of the local community in addition to reducing the environmental impact through initiating and participating in a number of activities that contribute to the health care, sports, education and private enterprise sectors. Driven by stc's continued focus on adhering to the rules and regulations of the Kuwaiti government, we are developing the company’s corporate social responsibility programs in the most effective way to make a positive impact on current and future generations in Kuwait”.

Commenting on the stc’s financial position as of December 31, 2021, Dr. Abdulrahman said: "Company's total assets reached KD 393.8 mn at the end of 2021, while the total shareholders' equity increased by 7% reaching KD 237.2 mn. Moreover, the company has a strong solvency position among its peers in the Middle East.

stc’s Board of Directors has recommended distributing cash dividends to respective shareholders of 60 fils representing 60% of the share’s nominal value for the year ended 2021. stc’s Board of Directors has also recommended distributing 100% free bonus shares from the issued and paid in capital by issuing 499,366,852 new shares to be distributed as free grant shares to the shareholders. This recommendation is subject to the approval of the Annual General Assembly”.

Dr.Abdulrahman commented on recommended cash dividends distribution: “These distributions are considered amongst the highest in the region in light of the continuous repercussions of the COVID-19 crisis and the arising concerns about maintaining the liquidity levels. However, stc has demonstrated its capacity by maintaining good cash flows resulted from adopting its successful business model as well as financial planning that ensure good financial returns and results that would enable the company to distribute sustainable cash dividends on an annual basis, and in the best interest of the company's valued shareholders”.

Commenting on stc’s most important achievements in 2021, Eng. Maziad Alharbi, CEO of stc said: “Despite all the challenges, 2021 was an exceptional year across all the standards, due to the company’s advanced strategy and the dedication of its employees to deliver their best in order to achieve company’s desired goals, meet the individuals and enterprise customers’ needs, as well as creating an added value and achieve better returns for its shareholders. In this regard, the digital transformation strategy that was developed and implemented by stc over the past few years has also been a key success factor that helped the company in its many contributions to the local economy, government initiatives and the growing demand for digital solutions and information technology.

In addition to our numerous successful achievements that reflect the company's position as a leader in telecommunications and digital solutions sector, this year, stc has made a major breakthrough in obtaining the approval from the Communication and Information Technology Regulatory Authority’s (CITRA) to launch the first-of-its-kind mobile virtual network operator (MVNO) license to launch Virgin Mobile Kuwait in partnership with Virgin Mobile Middle East & Africa. Through this license, Virgin Mobile Kuwait will be able operate using stc’s network, with stc acting as a Host Facilities Based Provider “FBP” with Virgin Mobile Kuwait, offering prepaid plans to users, which makes it the first company to provide a virtual telecommunications service in the country.

In line with the company’s corporate strategy which focuses on expanding its activities and shifting from the traditional telecommunication services to the digital services as well as the advanced integrated communications information solutions and advanced technical solutions, at the end of 2021, stc announced signing a binding agreement to fully acquire e-portal Holding Company and its subsidiaries. This acquisition of e-portal, one of the most prominent ICT companies, would enhance stc’s internal ICT capabilities to cope with the recent rapid global”.

Commenting on the announcement of company’s financial results for the year ended December 31, 2021, Eng. Maziad Alharbi, stated: “stc was able to achieve good financial results that meet the aspirations of the company's shareholders during the current circumstances and intense competition. Whereby, stc’s total revenue grew by 4.6% to reach KD 296.3 mn in 2021, compared to KD 283.2 mn last year. This increase is mainly attributed to the services and smart packages that are created to meet most of the individual sector’s needs, in addition to the growth in the enterprise sector through the implementation of the digital transformation strategy and providing integrated technical solutions to the private and government sectors. stc also ensured pushing its business into new areas of sustainable growth through a series of innovative initiatives aimed at upgrading the operational efficiency and delivering the best in-class services and products that cater to customers’ needs and meet their anticipations in light with COVID-19 crisis and its consequences. This was accompanied with stc’s support to business operations through its advanced infrastructure with the best and widest coverage of the 5G network”.

Alharbi added: “These outcomes resulted in the growth of EBITDA by 8.5% KD 79.6 million in 2021 compared to KD 73.4 million in 2020. Whereby, EBITDA margin reached 27% during the year ended in 2021 compared to 26% in the previous year. As a result, the company’s net profit during the FY2021 recorded a growth of 40% to reach KD 44.9 million (earnings per share 90 fils) compared to KD 32.1 million (earnings per share 64 fils) recorded by the company in 2020, as the financial impact of litigation had a significant impact on this growth in 2021. stc’s customer base reached approx. 2.0 million customers at the end of December 2021”.

Alharbi noted: "In stc, we are working on implementing a balanced cost-efficiency policy to achieve the best results and enhance profitability through adopting effective financial plans to direct our operational and capital expenditures. Whereby, stc was able to structure its capital expenditures, especially after the negative impact of the current economic crisis, to ensure liquidity of its cash flows under the current circumstances. stc’s financial results throughout FY2021 also reflected its competitiveness and strengthened its position as the second largest telecommunications company in terms of its market share of revenue in the Kuwait telecommunications sector with a market share of approx. 36%”.

Source: stc Press Release