Zain Saudi Arabia records first-ever quarterly profit
Revenues up 9% for Q1 2017
Zain Saudi Arabia reported its first ever quarterly net profit for the three months ending March 31, 2017 driven by revenue growth and optimization of its operational cost structure. Key performance indicators for the first quarter Q1, 2017: Compared to Q1, 2016, Zain Saudi Arabia reported: First ever quarterly net profit amounting to SAR 45 million; Revenues of SAR 1,919 million, up 9 percent, Gross profit of SAR 1,291 million, up 19 percent; EBITDA of SAR 665 million, up 49 percent; Operational income of SAR 273 million.
Bader Nasser Al-Kharafi, Zain Group Vice-Chairman and Chief Executive Officer and Vice-Chairman of Zain Saudi Arabia commented, “This strong performance of Zain’s operation in Saudi Arabia comes at a time when the Saudi telecom market is witnessing exponential growth in demand for digital services which we are exploiting, reflecting the success of our turnaround and cost optimization program, and justifying our heavy investment in expanding and upgrading the state-of-the-art 4.5G network.”
Kharafi continued, “Despite the intense competitive challenges of the Saudi telecom market, Zain Saudi Arabia is now on a forward growth trajectory and the management team remain cautiously optimistic and clearly focused on strategic priorities, continually striving to improve all aspects of this key operation for Zain Group.”
Furthermore, Kharafi said, “The decision to extend the operating license for an additional 15 years, combined with a unified telecom license and other favorable gestures by the Saudi authorities, will give Zain Saudi Arabia a significant stimulus towards achieving its business objectives and at the same time positively impacting its financial performance.”
Revenues grew by 9 percent in Q1, 2017 reaching SAR 1,919 million compared with SAR 1,765 million in Q1, 2016. This also represented a 7 percent increase in revenues from SAR 1,801 million generated for the fourth quarter (Q4) of 2016. The company recorded a significant 49 percent increase in EBITDA to reach SAR 665 million in Q1, 2017, up from SAR 445 million in Q1, 2016, and a 36 percent increase from SAR 490 million in Q4, 2016. EBITDA margin rose to 35 percent for Q1, 2017 up from 25 percent in Q1, 2016, and 27 percent in Q4, 2016.
Zain Saudi Arabia also reported a 19 percent increase in gross profit to reach SAR 1,291 million for Q1, 2017, reflecting a gross margin of 67 percent, up from SAR 1,086 million and 62 percent gross margin in Q1, 2016. Gross profit also increased by 13 percent, up from SAR 1,142 million and 63 percent gross margin in Q4, 2016.
The company recorded operational income of SAR 273 million in Q1, 2017, compared to operational loss of SAR 32 million in the same quarter of 2016. operational income increased by 214 percent compared to SAR 87 million in Q4, 2016.
Significantly, Zain Saudi Arabia announced its first quarterly net profit ever in Q1, 2017, amounting to SAR 45 million, compared to net losses of SAR 250 million in Q1, 2016 and SAR 135 million losses in Q4 2016. Kharafi concluded, “I would like to recognize the dedication of the entire Zain team in Saudi Arabia, and the continued support of the Board of Directors of both Zain Group and Zain Saudi Arabia, our shareholders and the Zain Group management team in the turnaround of this promising telecom entity.”