Cell C backer sees CEO step down
Saudi Telecom Company (STC), which indirectly owns a significant stake in Cell C, has reported that its chief executive Khaled al-Ghoneim has resigned.
Ghoneim, who was appointed only nine months ago, cited “special circumstances” in submitting his resignation to the company’s board.
STC’s board did not name a replacement in the statement to the Saudi stock market.
STC has come under intense earnings pressure in recent financial results. In January, the group revealed net income in the three months ending December 2012, of SR468 million (R1.099 billion), down from SR2.28 billion (R5.358 billion) a year earlier.
For the year, net income amounted to SR7.35 billion (R17.272 billion) compared to SR7.73 billion (R18.165 billion) for the corresponding period last year – a decrease of 4.9%.
STC attributed the decrease in net income over both periods to two main reasons including the re-evaluation of its investments fair value in in Cell C (South Africa) and Aircel (India) during the fourth quarter, which resulted in recognising a one-time, non-recurring and non-cash charge of SR641 million (R1.506 billion) provisions from impairment of intangible assets.
STC said that its investments in India based Aircel, Cell C and Axis, were not performing up to expectations, “and we intend to employ continued focus to enhance the performance of these companies.”
In 2008, STC invested $2.6 billion in a 35% stake in Oger Telecom, the Lebanese-controlled firm which has an indirect 75% holding in Cell C.
CellSAF, a BEE consortium of companies, holds the remaining 25% in SA’s third mobile operator.
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