Shares of Arabian Internet & Communication (AIC) climbed 3.6% as the company reported a significant earnings per share beat of 26.4% above Visible Alpha Consensus (VA Cons), bolstered by a robust 4.0% increase in revenue that exceeded expectations.
The company also successfully met its full-year 2024 guidance, contributing to a favorable market response.
The Riyadh-based company announced its quarterly earnings, detailing a 30.1% surge in revenue year-on-year (YoY), with reported revenue reaching SAR 3,731 million. This figure surpassed the VA consensus by 4.0%.
The impressive fourth-quarter growth marked an acceleration from the -1.5% seen in the third quarter and 2.6% in the second quarter. With a full-year growth of 9.3%, AIC met its guided range of 8-11%.
AIC's EBITDA margin also outperformed, coming in 120 basis points above consensus estimates. Gross profit for the period was reported at SAR 738 million, 1.9% higher than consensus, while net income reached SAR 327 million, marking a substantial 26.4% beat above consensus.
Analysts anticipate a positive reaction in the stock market, with the potential for a material re-rating hinging on a solid financial guidance for FY25.
In a note from Jefferies, analysts stated, "We note that selling and distribution expenses might have been affected by ECL provision releases, we need full financials to assess the quality of the margin beat."
Projections for FY25 include a forecasted growth of 9.6%, which is higher than the 8.5% consensus, largely driven by a bullish outlook on the Riyadh Smart Parking project, which is estimated to contribute up to a 6 percentage point increase in growth.
