(Updates with dividend in fifth paragraph.)

Oct. 19 (Bloomberg) -- Saudi Telecom Co., Saudi Arabia’s largest phone company by market value, said third-quarter profit dropped 53 percent as it booked foreign exchange losses and set aside money for provisions.

Net income fell to 1.56 billion riyals ($416 million) from 3.32 billion riyals a year earlier, the company said in a statement to the Saudi bourse today.

Saudi Telecom had a loss of 780 million riyals on foreign currency exchange fluctuations and the company set aside 134 million riyals after a government order, according to the statement. The company had a gain last year of 728 million riyals on the sale of towers to Aircel in India, it said.

State-run Saudi Telecom competes with Etihad Etisalat Co. and Zain Saudi Arabia, a unit of Kuwait’s Zain, in the world’s biggest oil exporter, home to 27 million people.

Saudi Telecom recommended paying a third-quarter dividend of 0.50 riyals a share.

The company had a market value of 72.2 billion riyals in Riyadh today before the earnings were announced. The stock has fallen 15.3 percent so far this year, giving the company a market value of 72.2 billion riyals.

--Editors: Tim Farrand, Peter Woodifield

To contact the reporter on this story: Mourad Haroutunian in Riyadh at mharoutunian@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net