stc paid its shareholders SR8.2 billion ($2.2 billion) this year, about twice what it had left after investing in its network. To cover the gap, it has been borrowing.
The math
In the first nine months, stc's business brought in SR11.9 billion in cash.
It spent SR7.7 billion of that on its network, including towers, fibre and 5G.
That left about SR4.2 billion, but it paid out SR8.2 billion.
The borrowing
stc's debt, minus the cash it holds, has jumped to SR9.5 billion, from almost nothing a year earlier.
Its total loans rose to SR23.5 billion, from SR15.2 billion.
The business is fine
Sales hit a record SR60.1 billion, up 3.7%.
Profit fell 5.7% to SR10.9 billion, but that's because last year included one-off gains. Without them, profit rose 2.6%.
What to watch
stc kept its dividend unchanged at SR0.55 a share per quarter.
Paying more than it earns works for a while. To keep it up without piling on more debt, stc needs faster growth. That is most likely to come from its newer businesses outside the core phone network, which grew 18.5% last quarter.
