Saudi Telecom Company (7010.SE): 2Q26 slightly ahead; DPS in-line

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Equity Research

29 July 2026 | 5:52PM GST

Saudi Telecom Company (7010.SE): 2Q26 slightly ahead; DPS in-line

Saudi Telecom (stc) reported 2Q26 results on July 29th post market close.

GS view: We expect the results to be taken neutral-to-cautiously-positive by the

market, supported by a modest revenue beat (+1% vs both GSe and consensus),

a net income beat vs consensus of ~5%, and broad-based subsidiary strength,

most notably stc Solutions’ strong Core ICT performance. However, the minor

beat could have been partially expected given stc Solutions’s 2Q26 results

reported earlier today. 2Q26 DPS was unchanged at SAR 0.55/sh qoq, consistent

with the SAR 2.20/sh annualized policy and offering no incremental positive

surprise, though confirming a sustained ~5.2% dividend yield.

Faisal AlAzmeh, CFA

+971(4)376-3476 |

Goldman Sachs International

Roman Reshetnev

+971(4)376-3423 |

Goldman Sachs International

Fadi Bataineh

+971(4)214-9959 |

Goldman Sachs International

2Q26 Revenues came in at SAR ~20.2bn (vs. c.SAR19.9bn in 1Q26), ~+1% above

both GSe and Bloomberg Consensus Data, and up +4% yoy (vs. up c.4% yoy in

1Q26). Within the revenue mix, we note the beat vs expectations at stc KSA (stc

telecom KSA: +4% yoy / +1% qoq) and other subsidiaries including stc Solutions

(reported 2Q26 earlier today), with Channels also surprising to the upside, despite a

-4% yoy revenue decline. This was offset by a weaker-than-expected Kuwait and

other revenues.

EBITDA came in at SAR 6.4bn (vs. c.SAR6.6bn in 1Q26), ~3% below GSe / broadly in

line with consensus, up +4% yoy (vs. up 7% yoy in 1Q26), with margins standing at

31.8% (vs. 32.9% in 1Q26) for the quarter, c.20bps below consensus of 32.0%. The

beat within the mix was driven mainly by other segments incl. stc Solutions (reported

2Q26 results on 29th July 2026 pre-market open, with EBITDA ~18% above

consensus), while offset by weaker-than-expected stc KSA, Kuwait, and other.

Reported net income stood at SAR 3.6bn (vs. c.SAR3.7bn in 1Q26), ~1% below GSe

/ ~5% ahead of consensus, and was down ~5% yoy on higher net finance costs

resulting from the sukuk issuance, in our view.

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