Saudi Arabia's Tadawul exchange posts 17% annual net income increase on higher revenue

The bourse's net income after zakat increased to $156.72 million in 2021

Saudi Arabia's Tadawul became the third publicly traded regional stock exchange on its listing in December 2021. Reuters

Saudi Tadawul Group, the owner and operator of the kingdom’s stock exchange, posted a 17 per cent increase in annual net income in 2021 driven by higher operating revenue amid strong performance from the kingdom's capital market.

Net income after zakat rose to 587.7 million Saudi riyals ($156.72m) in 2021 from the previous year, the bourse operator said in a filing on Sunday. Operating revenue increased by 8 per cent year on year to1.16 billion riyals in 2021.

The rise "was predominantly due to solid growth in trading services, post trade services and listing fees on the back of strong Saudi capital market performance in 2021", it said in the filing.

Tadawul, which is among the top 10 global stock markets with a market capitalisation of about $2.8 trillion, on December 8, 2021 when it listed became only the third publicly traded regional stock exchange, after the Dubai Financial Market and Boursa Kuwait.

The kingdom's Public Investment Fund owns a stake in Saudi Tadawul Group, which has four subsidiaries. These are: the Saudi Exchange, a dedicated arm running the kingdom's equity market previously known as the Saudi Stock Exchange Company; the Securities Clearing Centre Company (known as Muqassa); the Securities Depository Centre Company (Edaa); and a new subsidiary focused on applied technology services, known as Wamid.

Tadawul raised 3.78bn riyals through an initial public offering that was 121 times oversubscribed. It sold 36 million shares representing 30 per cent of its issued share capital to institutional and individual investors.

"Through its subsidiaries, Saudi Tadawul Group continued to contribute to developing and diversifying the Saudi capital markets and diversify its instruments, with the new listings reflecting a 7.5 per cent increase in average daily traded value in 2021," said Khalid Al-Hussan, group chief executive of Saudi Tadawul.

The group’s earnings before interest, taxes, depreciation and amortisation, or Editda, increased 13 per cent year on year to 668.85m riyals in 2021, on the back of growth in operating revenue against moderate growth in its operating expenditures, it said.

The group recorded a 17.09m riyal increase in general and administrative expenses, which was diluted by a reduction of 19.47m riyals in an impairment charge on financial assets.

Its zakat expense decreased by about 21 per cent year on year to 66.22m riyals in 2021, as a result of optimisation of the group's financial assets last year.

"The group’s financial results in 2021 reflect its resilient performance as it delivers on its growth plans," Mr Al-Hussan said.