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RIYADH, April 21 (Reuters) - Saudi Telecom Co (STC), the Gulf’s No.2 telecom operator, missed forecasts with a 38.5 percent year-on-year plunge in first-quarter net profit on Sunday attributed to charges relating to an Indian affiliate.
The firm, still majority government-owned nearly a decade after being listed, posted a net profit of 1.55 billion riyals ($413 million) for the three months to March 31, down from 2.52 billion riyals a year earlier.
STC was expected to post a profit of 2 billion riyals, a Reuters poll of analysts showed.
The company said in a separate statement that it would distribute first-quarter dividends of 0.5 riyals per share.
It said its gross profit rose 2.6 percent but it had to take “non-cash charge of 500 million riyals” relating to Aircel, an affiliate in India.
Two STC chief executives have quit in less than a year, while the heads of its domestic and international operations also resigned within the same period.
Its main competitor, Etihad Etisalat (Mobily), reported an 11 percent rise in first quarter net profit on Saturday.
STC’s quarterly revenue for services rose to 11.5 billion riyals from 11.1 billion a year earlier.
Rising demand for broadband lifted earnings in the first nine months of 2012, but the company then reported a 79 percent drop in fourth-quarter profit citing rising costs and one-off charges at its Indian and South African affiliates.
Reporting by Angus McDowall; editing by Jason Neely