Summary

The state difference: a floor became a payment schedule

Capital-allocation stories in telecom usually stall at the announcement stage: a board signals intent, the market re-prices, and the actual cash flow question is deferred. With stc the retained primary record allows something more testable — a comparison of what the company committed to, what shareholders approved, and what actually left the company's accounts, with dates and amounts for each step.

The prior state was set on 24 August 2024, when stc's Board approved a dividend policy committing the company to pay at least SAR 0.55 per share per quarter for three years, beginning with the Q4 2024 distribution and running through Q3 2027. The same announcement set the governance rule that matters for everything above the floor: any special dividend requires a Board recommendation and General Assembly ratification. https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=82218&cs=7010&locale=en That last sentence is the hinge of the entire capital-allocation structure. The quarterly floor is automatic once ratified; anything above it must win a second, separate approval from the shareholders themselves.

That approval arrived on 6 November 2024, when the Ordinary General Assembly ratified the three-year policy. From that date the SAR 0.55 quarterly minimum ceased to be a proposal and became an obligation with a defined term. https://www.stc.com/content/dam/groupsites/en/pdf/stc2025-annual-report-en.pdf https://argaamplus.s3.amazonaws.com/83c438fd-759c-41ac-8127-43c863cbd354.pdf The distinction matters economically: a policy ratified at a General Assembly creates a payment schedule that management must fund in every quarter of the window, converting a communication into a fixed claim on operating cash flow.

What has actually been paid

The effective record, as assembled from stc's FY2025 annual report and its regulated interim disclosures, is as follows. Each quarterly installment of SAR 0.55 per share was distributed on a stated date: the Q4 2024 dividend on 24 March 2025, Q1 2025 on 20 May 2025, Q2 2025 on 19 August 2025, and Q3 2025 on 26 November 2025. Total cash dividends distributed during 2025 reached approximately SAR 21 billion, a figure the annual report ties explicitly to the approved policy plus the additional FY2024 distribution. https://www.stc.com/content/dam/groupsites/en/pdf/stc2025-annual-report-en.pdf

The regulated disclosures confirm the same cadence from the announcement side. Tadawul issuer announcements declared the Q2 2025 interim dividend of SAR 0.55 per share (published 27 July 2025) and the Q3 2025 interim dividend of SAR 0.55 per share (published 3 November 2025), each citing the policy ratified at the Ordinary General Assembly on 6 November 2024 as its legal basis. https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=89008&cs=7010&locale=en https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=91179&cs=7010&locale=en The company's financial statements, in Note 21, record the same distributions from the balance-sheet side: quarterly dividends of SAR 0.55 per share actually distributed for Q4 2024, Q1 2025 and Q2 2025. https://argaamplus.s3.amazonaws.com/83c438fd-759c-41ac-8127-43c863cbd354.pdf

The record extends beyond 2025. On 28 April 2026, stc declared a Q1 2026 interim dividend of SAR 0.55 per share — SAR 2,744.39 million in total on 4,989.80 million eligible shares, with an eligibility date of 30 April 2026 and a distribution date of 20 May 2026. https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=94731&cs=7010&locale=en That disclosure does two things. It confirms the floor is still being honored well into the second year of the three-year window, and it demonstrates the arithmetic of the floor itself: SAR 0.55 on roughly 4.99 billion eligible shares is about SAR 2.74 billion per quarter, or near SAR 11 billion per year of committed minimum distribution. That is the scale of the obligation the 2024 policy created.

The special dividend: the conditional channel, exercised once

The floor is only half the structure. The policy's special-dividend clause — Board recommendation plus General Assembly ratification — was exercised once in the retained record, for FY2024. The Board recommended a one-time special cash dividend of SAR 2 per share, a total of SAR 9,973.82 million, equal to 20% of the share's par value. The Ordinary General Assembly's first meeting of 2025, held 13 May 2025, included voting on that recommendation as an agenda item, with distribution scheduled to commence on 2 June 2025; the same document states that total FY2024 dividends, distributed and proposed, would reach SAR 3.75 per share, or 37.5% of par. https://www.stc.com/content/dam/groupsites/en/pdf/GAMattachments-2025-en.pdf

The vote outcome is confirmed from the financial statements, which record that on 13 May 2025 the General Assembly approved the Board's recommendation of the SAR 2-per-share special dividend, and from the annual report's payment calendar, which shows the SAR 2 paid on 2 June 2025. https://argaamplus.s3.amazonaws.com/83c438fd-759c-41ac-8127-43c863cbd354.pdf https://www.stc.com/content/dam/groupsites/en/pdf/stc2025-annual-report-en.pdf So the conditional channel worked exactly as designed: recommendation, ratification, payment, in that order, with the payment date roughly three weeks after the vote and about nine months after the policy itself was ratified.

One evidentiary boundary should be stated plainly. The 13 May 2025 assembly document is an agenda attachment; it presents the recommendation for voting rather than reporting the result. The approval is established indirectly, through the financial statements and the annual report's payment record, not through a dedicated voting-result announcement in the retained set. That is sufficient to treat the special dividend as paid — cash has a way of confirming itself — but readers should know that the vote tally itself is not part of the evidence here.

The aggregate numbers and what the 141.4% actually measures

stc's FY2025 earnings presentation summarizes the year for investors: SAR 4.2 per share distributed during 2025, comprising four quarterly installments of SAR 0.55 plus the SAR 2.0 special dividend for FY2024, and a 2025 payout ratio of 141.4%. https://www.stc.com/content/dam/groupsites/en/pdf/EarningsPresentationQ4-2025En.pdf Both figures reward careful reading.

The SAR 4.2 is a blended calendar figure. It stacks distributions whose fiscal attributions differ: three quarterly installments of SAR 0.55 (Q1–Q3 2025 earnings), the Q4 2024 installment paid in March 2025, and the SAR 2 special dividend that belongs to FY2024 earnings but was paid in June 2025. The company's total FY2024 dividends — distributed and proposed — were SAR 3.75 per share on the company's own account; the 2025 calendar simply paid most of it out during 2025. https://www.stc.com/content/dam/groupsites/en/pdf/GAMattachments-2025-en.pdf Neither number is wrong; they measure different things, and conflating them is how payout-ratio confusion starts.

The 141.4% payout ratio is the more consequential figure. A payout ratio above 100% means the company distributed more cash in the year than it reported as profit attributable for that period. That is possible only by drawing on accumulated reserves, retained earnings or prior-year profits — which is precisely what a special dividend funded from FY2024 does.

The ratio is an issuer-computed figure and its exact reference base (which earnings definition, which price basis for any yield calculation) is not stated in the presentation excerpt, so it should be read as directional evidence of distribution intensity rather than as a precise solvency metric. What it does establish is the economic character of 2025 for stc shareholders: a year in which the company deliberately returned more than it earned, using a ratified floor plus a one-time draw-down channel.

Why the structure is the story

Strip away the dates and amounts and the structure that remains is a three-part allocation machine:

  1. A ratified floor. SAR 0.55 per share per quarter from Q4 2024 through Q3 2027, approved by the Board (24 August 2024) and ratified by shareholders (6 November 2024). This part of the cash flow is committed: management cannot cut it below the floor without a policy change, and the record shows every installment to date paid on schedule. https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=82218&cs=7010&locale=en https://www.stc.com/content/dam/groupsites/en/pdf/stc2025-annual-report-en.pdf
  2. A conditional channel. Special dividends require a fresh Board recommendation and a fresh General Assembly vote each time. This is the variable component of shareholder returns, and it is inherently episodic. It has been used once in the retained record, for FY2024. https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=82218&cs=7010&locale=en https://www.stc.com/content/dam/groupsites/en/pdf/GAMattachments-2025-en.pdf
  3. A defined expiry. The floor terminates at the Q3 2027 distribution. After that, the entire dividend path returns to ordinary Board and shareholder discretion — no minimum is committed beyond the window. https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=82218&cs=7010&locale=en

This structure is more informative than any single year's yield. It tells an investor that stc has converted roughly SAR 11 billion per year of its cash flow into a fixed claim (the floor on ~4.99 billion eligible shares), that it retains an option-like instrument for returning surplus (the special channel, priced at SAR 9.97 billion when last exercised), and that both instruments have a sunset in Q3 2027. https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=94731&cs=7010&locale=en https://www.stc.com/content/dam/groupsites/en/pdf/GAMattachments-2025-en.pdf The 141.4% payout ratio then reads as the measured cost of exercising that option once: deliberate, bounded, and not repeatable without a new vote. https://www.stc.com/content/dam/groupsites/en/pdf/EarningsPresentationQ4-2025En.pdf

The falsification test and the next observable conditions

The thesis that stc's dividend state is effective rather than merely announced would be falsified by observable events of a specific kind: a missed or reduced quarterly installment within the policy window, a General Assembly rejection of a recommended special dividend, or a policy amendment rescinding the SAR 0.55 floor before Q3 2027. None of these has occurred in the retained record; every installment declared under the policy has been paid on the disclosed date, and the one special recommendation put to shareholders was approved. https://www.stc.com/content/dam/groupsites/en/pdf/stc2025-annual-report-en.pdf https://argaamplus.s3.amazonaws.com/83c438fd-759c-41ac-8127-43c863cbd354.pdf

The forward-looking conditions are correspondingly concrete. First, each quarterly declaration between now and Q3 2027 either confirms or breaks the floor; the Q1 2026 declaration of 28 April 2026 was the latest such confirmation, and the pattern of publishing dates (late July, early November, late April) suggests the next declarations arrive on a predictable disclosure rhythm. https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=94731&cs=7010&locale=en https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=89008&cs=7010&locale=en https://www.saudiexchange.sa/wps/portal/saudiexchange/newsandreports/issuer-news/issuer-announcements/issuer-announcements-details/?anCat=1&anId=91179&cs=7010&locale=en Second, any new special dividend would announce itself as a Board recommendation followed by an assembly agenda item — the exact documentary sequence observed for FY2024 — so the absence of such an agenda item is itself evidence that the conditional channel is not being exercised. https://www.stc.com/content/dam/groupsites/en/pdf/GAMattachments-2025-en.pdf Third, as Q3 2027 approaches, the material question shifts from compliance to renewal: whether the Board proposes a successor policy, and on what floor, is a decision that will re-price the entire committed component of stc's shareholder return.

What this record does not cover

The retained evidence set is deliberately bounded, and its boundaries matter for interpretation. It covers stc's dividend policy, its ratification, every quarterly declaration and payment within the record window, the FY2024 special dividend cycle, and the issuer-computed aggregate and payout figures for 2025. It does not contain evidence on stc's tower infrastructure arrangements, its international holdings, or any domestic market-structure development; no claim about those subjects is made here, because the sources retained for this article do not support one. https://www.stc.com/content/dam/groupsites/en/pdf/stc2025-annual-report-en.pdf https://www.stc.com/content/dam/groupsites/en/pdf/EarningsPresentationQ4-2025En.pdf Readers extending this analysis to those areas should treat them as entirely separate evidentiary questions.

One additional verification gap is recorded rather than resolved: stc's official investor-relations dividend information page was retrieved but returned only navigation text, so its dividend table could not be read directly in this session. https://www.stc.com/content/stcgroupwebsite/sa/en/investors/dividents/dividends-information.html The payment record presented above therefore rests on the regulated exchange disclosures, the audited and interim financial statements, the annual report and the assembly documents — a chain that is independently sufficient, but worth noting for anyone who later consults the IR page expecting a third confirmation.

The bounded conclusion

stc entered 2026 with a dividend state that is unusual among national telecom operators in how completely it has moved from words to cash: a floor ratified in November 2024, paid on schedule in every subsequent quarter, extended by a special dividend that followed its contractual path from Board recommendation to shareholder vote to payment in under a year, and documented at each step by regulated disclosures. The cost is visible in the 141.4% payout ratio — a one-time intensification funded from accumulated capacity, not a new entitlement. https://www.stc.com/content/dam/groupsites/en/pdf/EarningsPresentationQ4-2025En.pdf https://argaamplus.s3.amazonaws.com/83c438fd-759c-41ac-8127-43c863cbd354.pdf

The uncertainty that matters going forward is concentrated in three places: the integrity of the remaining quarterly installments through Q3 2027, the exercise or non-exercise of the special channel in any given year, and the terms of whatever replaces the floor when it expires. Each is observable in the same document classes that proved this year's record — exchange announcements, assembly agendas and financial statements — which is precisely why the 2025 record is worth having established: it sets the evidentiary baseline against which every future capital-allocation decision at stc will be tested.