SEOUL: Samsung Electronics Co. announced on Wednesday its first stock split and said it expects demand for semiconductors to remain strong in 2018, as it posted record annual profit driven by a so-called memory chip “super-cycle.”
The tech giant’s stock split is the latest in a series of moves to bolster shareholder returns, including 5.8 trillion won (SR2.04 billion) in annual dividends and 9.2 trillion won in share buybacks and cancelations in 2017.
The firm’s largesse has encouraged investors to hold shares despite concerns that the memory business may be peaking. The stock split will open the door to retail investors as well, boosting liquidity and underpinning valuations, analysts said.
“The stock split comes as a surprise to me,” said Kim Sung-soo, a fund manager at LS Asset Management who holds Samsung shares, noting that Samsung previously had shrugged off investors’ calls to split its shares.
“This will not have an impact on the company’s fundamentals, but it will increase supply of the stock and have a positive impact on shares.”
Led by a stellar fourth quarter, the global leader in televisions, memory chips and smartphones brought home an annual operating profit of 53.7 trillion won in 2017, outstripping the previous record of 36.8 trillion won in 2013.
While the profit was expected, the firm’s shares surged more than 8 percent after it unveiled the stock split. They closed up 0.2 percent.
In further good news for shareholders, Samsung eased concerns that the huge expansion in the global semiconductor business may be tapering off, saying the outlook for 2018 remained strong.
Chip makers like Samsung, South Korean rival SK Hynix Inc. and Intel Corp. have been riding a boom in sales of semiconductors as the world demands ever greater processing capacity to power data centers, high-tech smartphones and the blockchain ledgers behind cryptocurrencies.
“Looking at the mid-to-long term, Samsung expects the components business to see demand expand from new applications,” the company said in a statement.
Samsung’s operating profit for the three months ended December leapt 64 percent on year to 15.15 trillion won, in line with its forecasts.
The chip business was Samsung’s top earner last year, posting a record operating profit of 35.2 trillion won and more than doubling its profit on-year in the fourth quarter alone.
Samsung said it expected DRAM and NAND flash chip shipments to grow on-year by about 20 percent and 40 percent respectively in 2018.
The foundry business, which makes chips to order, would jump from 4th place to be a “strong market No. 2” behind Taiwan Semiconductor Manufacturing Co. (TSMC) in 2018, partly due to the cryptocurrency boom.
Cryptocurrencies are digital currencies that use encryption techniques for security and can be traded. The technology needs powerful chips to validate transactions.
Earlier this month TSMC said it expected the cryptocurrency market to drive up demand for high-end chips and help it post record revenue this year, outweighing softening sales to smartphone vendors.
Samsung’s mobile division, which competes with Apple, reported operating profit of 2.4 trillion won in the fourth quarter, down 3 percent from the previous corresponding quarter.
The launch of the Galaxy S9 flagship smartphone next month should minimize any off-season weakness in demand during the first quarter, the company said.
However, the outlook for Samsung’s smartphones was uncertain amid competition from Chinese rivals in markets like Europe and Asia, said Tom Kang, research director at data provider Counterpoint.
Samsung’s display business, which supplies Apple with OLED screens, reported a 1.4 trillion won profit in the fourth quarter, up 5 percent from the same period last year.
KwonYoung Choi, the vice president of Samsung’s display unit, brushed off reports that Apple will cut iPhone X production for the first three months of the year amid soft sales, saying the screen business was not dependent on any one client.
Samsung spent a record 43.4 trillion won in capital expenditure last year to boost production of memory chips and organic light-emitting diode (OLED) screens. As a result, capital expenditure would fall in 2018, it said.
Samsung unveils stock split as it reports record 2017 profit
Samsung unveils stock split as it reports record 2017 profit
Closing Bell: Saudi main index slips to close at 11,892
- Parallel market Nomu gained 86.66 points, or 0.28%, to close at 31,007.06
- MSCI Tadawul Index lost 3.16 points, or 0.21%, to close at 1,493.74
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Wednesday, losing 21.63 points, or 0.18 percent, to close at 11,892.32.
The total trading turnover of the benchmark index was SR2.79 billion ($746 million), as 132 of the stocks advanced and 86 retreated.
The Kingdom’s parallel market Nomu gained 86.66 points, or 0.28 percent, to close at 31,007.06. This comes as 49 of the listed stocks advanced, while 29 retreated.
The MSCI Tadawul Index lost 3.16 points, or 0.21 percent, to close at 1,493.74.
The best-performing stock of the day was Al-Baha Investment and Development Co., whose share price surged 8.33 percent to SR0.52.
Other top performers included Red Sea International Co., whose share price rose 6.32 percent to SR60.60 and Saudi Industrial Development Co., whose share price surged 5.07 percent to SR30.05.
MBC Group Co. recorded the biggest drop, falling 3.31 percent to SR52.50.
Bawan Co. also saw its stock prices fall 3.05 percent to SR54.10.
Savola Group saw its stock prices drop 2.97 percent to SR35.90.
On the announcements front, Saudi Arabian Mining Co., also known as Ma’aden, has announced acquiring a full stake of Mosaic Phosphate in Waad Al-Shamal Phosphate Co.
According to a Tadawul statement, the financial impact of the acquisition will be reflected in the company’s consolidated financial statements for the year ending Dec.31.
Ma’aden ended the session at SR49.20, up 0.61 percent.
Kingdom Holding Co. has announced the acquisition of an additional stake in xAI, with a total investment of SR 1.5 billion, as part of xAI’s Series C funding round.
A bourse filing revealed that the transaction comes after KHC’s previous investment of the same amount in xAI during its Series B funding round.
The move falls in line with KHC’s strategic collaboration with Elon Musk, and also follows its strategic stake in X, formerly known as Twitter, held since 2015. xAI is an artificial intelligence firm established by Elon Musk and a team of top-notch engineers to build AI to further accelerate human scientific discovery as a whole.
KHC ended the session at SR9.35, up 0.88 percent.
Bank Al-Jazira has announced its intention to issue Additional Tier 1 Sukuk under its SR 5 billion Additional Tier 1 Capital Sukuk Issuance Program by way of private placement in Saudi Arabia.
According to a Tadawul statement, the bank has mandated Al-Jazira Capital, Al-Rajhi Capital and HSBC Saudi Arabia as joint lead managers and dealers for the potential offer. The filing further revealed that the purpose of the offer is to bolster the capital base of the bank, thereby backing its financial and strategic needs.
Bank Al-Jazira ended the session at SR18.64, up 0.21 percent.
Methanol Chemicals Co. has announced the approval of the Ministry of Energy’s request to renew the allocation of the required feedstock to produce several specialized petrochemical products.
A bourse filing revealed that this follows the company’s Industrial Plot Allocation Agreement with Jubail and Yanbu Industrial Cities Services Co. in the PlasChem Park in Jubail (2) to establish and operate a Choline Chloride and Methyl Diethanolamine Methane plant.
Methanol Chemicals Co. ended the session at SR18.70, down 0.32 percent.
View United Real Estate Development Co. has signed a memorandum of understanding with Watheeq Capital to establish real estate funds to enhance investment opportunities.
According to a Tadawul statement, it will be valid from the date of its signature for one year, and will not be automatically renewed except by a written agreement signed between the two parties.
View United Real Estate Development Co. ended the session at SR68.50, down 0.70 percent.
MODON inks $453m in private sector deals to expand Saudi industrial cities
JEDDAH: Saudi industrial cities are set for further growth as the sector's authority revealed it has signed 23 development contracts with the private sector, valued at over SR1.7 billion ($453 million).
The agreements, announced by the Saudi Authority for Industrial Cities and Technology Zones, or MODON, encompass a wide range of projects aimed at boosting industrial capabilities.
These include the expansion of industrial cities, the construction of ready-made factories, the enhancement of MODON’s safety and security systems, and initiatives aligned with the National Industry Strategy.
Additionally, the projects will address water and irrigation needs, improve water treatment facilities, upgrade electricity services, and expand road networks.
MODON’s latest contracts highlight the growing role of the private sector in supporting Saudi Arabia’s ambitious Vision 2030 goals, which emphasize economic diversification, local production, and the creation of an attractive environment for both domestic and foreign investment.
The projects are expected to enhance the competitiveness of Saudi industrial cities, foster greater investment, and improve operational efficiency for businesses.
The agreements will also contribute to regional development, improve environmental sustainability, and promote vegetation growth, MODON stated in a post on its X account.
The development of these projects is in line with Saudi Arabia’s broader efforts to build a dynamic and innovative economy.
This move follows a previous round of agreements in July, when MODON signed nine contracts valued at SR1 billion to enhance infrastructure and service facilities across various industrial hubs. Key initiatives from that round included the development of infrastructure in Makkah’s and Jeddah’s industrial cities and the installation of 132-kilovolt overhead power lines in Tabuk’s industrial city.
Looking ahead, MODON plans further expansion with projects that will improve electrical services, such as the construction of 115-kV overhead power lines in Hafr Al-Batin’s industrial city. The authority is also focusing on enhancing infrastructure networks for the first and second phases of Dammam’s Third Industrial City.
Since its establishment in 2001, MODON has overseen the development of 36 industrial cities and is responsible for managing both operational and under-construction industrial lands across the Kingdom.
In the first quarter of 2024, MODON attracted SR3.4 billion in private sector investments, signed 142 new industrial contracts, and registered a total of 6,758 factories.
As part of its commitment to sustainable growth, MODON also planted over 576,000 trees and finalized 335 logistics contracts, underscoring its broader environmental and economic development objectives.
2.25m freelancers in Saudi Arabia join national economy
- The 25— 34 age group is particularly active in freelancing
- 62% of freelancers hold bachelor’s degrees
JEDDAH: Freelancing is emerging as a key contributor to Saudi Arabia’s economy, with over 2.25 million individuals registered on the freelance platform by September.
This growth reflects the rising popularity of flexible work, supported by the Ministry of Human Resources and Social Development’s launch of the “Future Work” company in 2019 to enhance the freelancing ecosystem by promoting modern workstyles, including remote work and flexible-hour freelancing.
The company’s mission is to create more job opportunities, empower Saudi talent, and develop a labor market that complements traditional employment while aligning with global trends, according to the Saudi Press Agency.
Freelancers make a notable contribution to Saudi Arabia’s economy. In 2023, the sector contributed SR72.5 billion ($19 billion) to the gross domestic product, representing 2 percent of the Kingdom’s total output. This highlights its role in diversifying income sources and strengthening the national economy.
The initiative, along with other efforts, has contributed to reducing the Kingdom’s unemployment rates. Saudi Arabia has revised its unemployment target to 5 percent by 2030, down from the previous goal of 7 percent, as part of Vision 2030’s ambitions.
The progress was highlighted by Minister of Human Resources and Social Development Ahmed Al-Rajhi during a panel discussion at the Budget Forum 2024 in November, where he detailed the Kingdom’s strides in improving employment figures. Al-Rajhi said that the unemployment rate among Saudis was 12.8 percent in 2018, and it has recently dropped to 7.1 percent.
The Ministry of Human Resources and Social Development issues freelance certificates to individuals specializing in specific fields, enabling them to work independently in activities approved by the ministry through the official freelance portal.
A recent report from Future Work highlights the sector’s rapid development and its alignment with Vision 2030. The report also emphasizes the diverse nature of freelance activities, with trade and retail leading at 38 percent, followed by industry at 13 percent and business services at 11 percent. The diversity demonstrates the sector’s adaptability to meet various economic needs.
Freelancing accommodates individuals with different educational backgrounds. According to the report, 62 percent of freelancers hold bachelor’s degrees, while 31 percent have high school diplomas or less, and 7 percent possess higher degrees.
Technology plays a pivotal role in the sector’s growth, with digital platforms becoming indispensable for freelancers, especially in fields like technology, information, and finance. These tools enhance productivity and connectivity, fostering sustainability and success in freelance careers.
Geographically, the Riyadh region accounts for the largest share of freelancers at 27 percent, followed by Makkah at 22 percent, and the Eastern Province at 14 percent.
The 25— 34 age group is particularly active in freelancing, reflecting the younger generation’s growing interest in this flexible career path.
The report said that 3.2 million women have expressed interest in joining the freelance market, underscoring the effectiveness of initiatives aimed at enabling women to balance professional and personal commitments.
Government programs like Reef, the Social Development Bank, and the Human Resources Development Fund further support freelancers by fostering an environment conducive to their growth and success, SPA reported.
Saudi Arabia’s food & beverage sales drive $3.14bn in consumer spending
- Restaurants and cafes topped the list with SR1.69 billion in transactions: SAMA data
RIYADH: Saudi Arabia’s consumer spending reached SR11.8 billion ($3.14 billion) in the week of Dec. 15 to Dec. 21, with the food and beverage sectors continuing to lead in sales, official data showed.
Despite an overall decline of 8.1 percent from the previous week, key sectors, especially dining and food, showed consistent performance, according to data from the Saudi Central Bank, also known as SAMA.
The restaurants and cafes sector topped the list with SR1.69 billion in transactions, despite a 13.9 percent weekly dip. Food and beverage spending followed closely, settling at SR1.69 billion as well, reflecting a 9 percent decrease. These categories, however, maintained their dominance in consumer expenditure.
The overall decrease in consumer spending is attributed to the timing of salary disbursements, traditionally paid on the 27th of each month, which typically leads to lower spending in the preceding weeks.
Additionally, the winter holiday season, during which many expatriates travel home, further influenced the dip in domestic spending.
Other sectors saw more moderate drops. The value of clothing and footwear transactions fell by 5.2 percent to SR864.15 million, while construction and building materials recorded a small 0.9 percent decline, totaling SR355 million.
The electronics and electric devices sector saw an 8.7 percent weekly decrease in value, while gas stations and health-related sales also experienced declines of 9.4 percent and 7.3 percent, respectively.
Jewelry sales recorded a 14.4 percent drop in transaction volumes, with a slight 3.9 percent decrease in value. Miscellaneous goods and services saw a 9.1 percent reduction in sales, totaling SR1.4 billion.
Regional breakdown
Regionally, Riyadh remained the largest market with a POS value of SR4.2 billion, although this represented a 6 percent decrease compared to the previous week.
Jeddah saw a 7.5 percent drop to SR1.6 billion, while Dammam recorded a slight 3.6 percent decline to SR617.5 million.
Among smaller cities, Hail experienced the largest decrease, with spending down 14.8 percent to SR169.6 million, and a 12.2 percent reduction in transaction volumes. Makkah recorded a 4.4 percent decline in value, settling at SR502.8 million, while Tabuk saw a 12.8 percent decrease in transaction value to SR210.4 million.
Despite the seasonal slowdown, the food and beverage sectors continue to drive the market, maintaining a steady pace as consumer behavior shifts with the winter season.
Saudi Arabia leverages project management to achieve Vision 2030 milestones
RIYADH: In Saudi Arabia’s pursuit of the ambitious goals set out in Vision 2030, project management has emerged as a key enabler, ensuring that planning aligns seamlessly with execution to achieve transformative outcomes.
This vital discipline is playing a crucial role in turning visionary ideas into reality, as highlighted during a prominent forum held on Tuesday.
The event emphasized the central role of project management in realizing Vision 2030, a comprehensive framework launched in 2016 by Crown Prince Mohammed bin Salman.
The vision aims to diversify the economy and reduce the Kingdom’s dependence on oil. Currently, over 5,000 projects, valued at $5 trillion, are underway, signaling Saudi Arabia's substantial progress in reshaping both its economic and social landscapes.
“Project management is the bridge where vision meets ambition, converting plans into tangible results,” said Badr Burshaid, chairman of the Global Project Management Forum.
He also pointed to the Kingdom's significant investment in human capital, particularly through initiatives such as the Human Capability Development Program, which has placed Saudi Arabia among the top 10 nations globally in equipping professionals with essential business skills.
The forum highlighted the importance of strategic execution in driving economic transformation.
Badr Al-Dulami, deputy minister of transport and logistics services for roads affairs, described project management as the “pulse of transformation,” underscoring its role in fostering competitiveness and innovation.
“This summit is not just an event but a platform for uniting expertise and driving collaboration,” Al-Dulami said.
During the forum, excellence awards were presented to pioneering projects that exemplify Vision 2030’s focus on innovation, sustainability, and impactful outcomes.
Al-Dulami noted that these awards serve as an invitation to explore new horizons of creativity while staying aligned with national objectives.
Saudi Arabia’s success under Vision 2030 is evident across several key sectors. With 87 percent of initiatives either completed or on track, the Kingdom has made significant strides in improving its business environment, generating employment, and advancing major projects like NEOM and the Red Sea Project.
These achievements not only demonstrate Saudi Arabia’s strategic capabilities but also highlight its leadership in executing large-scale initiatives.
In closing, Burshaid urged participants to harness the insights and momentum gained from the forum to ensure continued progress.
“The seeds planted today will grow into achievements that inspire future generations,” he said, encouraging stakeholders to prioritize innovation and collaboration as Saudi Arabia moves forward.
With project management at the heart of Vision 2030, Saudi Arabia is setting a global benchmark for strategic execution and sustainable development, solidifying its role as a leader in transformative growth.
