Saudi Arabia’s PIF-backed companies increase dividends

Dubai: Saudi Telecom Co (STC) announces an increase in dividends, joining other companies partly owned by the Saudi Arabia’s sovereign wealth fund and listed on Riyadh’s bourse in doing so.

The higher dividends will enhance the income of the Public Investment Fund (PIF), allowing it to reinvest in high-growth sectors and further Saudi Arabia’s economic diversification. STC announced that it will distribute at least $0.15 (Dh0.55) per share each quarter for the next three years, starting in the final quarter of 2024. This marks a 38 per cent increase from the current $0.11 (Dh0.4) per share.

PIF holds a 64 per cent stake in STC’s five billion shares. With the new dividend plan, it will receive $469 million (Dh1.7 billion) each quarter, up from the current $341 million (Dh1.2 billion).

STC paid a special dividend of $0.27 (Dh0.99) per share for 2023, adding $853 million (Dh3.1 billion) to PIF's coffers.

STC is one of at least 10 major listed Saudi companies where PIF has a significant stake. The sovereign wealth fund owns 16 per cent of Saudi Aramco, the largest publicly traded oil company, which slightly increased its second-quarter dividend despite a 3.4 per cent decline in quarterly profits compared to the previous year.

Three PIF-backed Saudi banks — Saudi National Bank (SNB), Riyad Bank, and Alinma Bank — have also raised their dividends recently.

SNB declared dividends of $0.48 (Dh1.76) per share, up from $0.39 (Dh1.43) per share in 2023.

Alinma will pay $0.13 (Dh0.48) per share for the first half of 2024, and if it maintains this rate for the subsequent quarters, it will be the highest annual dividend since 2018.

Riyad Bank's first-half dividend was $0.21 (Dh0.77) per share, up from $0.17 (Dh0.62) per share last year, marking its highest pay-out since 2013.

Following the dividend announcement, STC’s shares surged nearly 10 per cent to a 13-month high on Sunday.