UPDATE 2-Saudi Telecom Q2 profit surges to beat forecasts

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By Souhail Karam

RIYADH, July 20 (Reuters) - Saudi Telecom 7010.SE (STC) said second-quarter net profit beat forecasts to rise 24 percent, on higher income from foreign ventures as well as domestic mobile and broadband services.

STC, the second-largest Arab telecom provider by market value, made a net profit of 3.84 billion riyals ($1.02 billion) in the three months to June 30, compared to 3.1 billion riyals in the same period a year earlier, it said in a statement on the Saudi bourse website.

It was STC's highest quarterly net profit in at least 12 months. Annual quarterly profit growth also more than doubled compared to the first-quarter when it was at 11.4 percent.

STC beat forecasts by analysts who were expecting a second-quarter profit of between 2.8 billion riyals to 3.51 billion riyals in a Reuters survey last month. [ID:nL30685455]

"This (rise) is attributed to increases in revenues of mobile and broadband and a rise in income from foreign investment," it said.

The company began consolidating the Turkish and South African businesses acquired for $2.56 billion this year through a 35 percent stake in Oger Telecom. Its earlier and first foreign ventures, in Asia and Kuwait, have yet to start making money.

Saud al-Duweish, STC's chief executive officer, said in January the Oger Telecom purchase would boost profit by 4 percent and revenue by 30 percent in 2008.  Continued...