Zain ‘stronger fi­nan­cially’ as profit jumps at Saudi unit

The National - News - - BUSINESS - MICHAEL FAHY

The chief ex­ec­u­tive of tele­coms com­pany Zain said the com­pany is now “in a much stronger fi­nan­cial po­si­tion” af­ter its Saudi Ara­bian arm posted its fifth suc­ces­sive quar­terly profit.

Net profit for the three months to Septem­ber 30 more than dou­bled to 121 mil­lion Saudi riyals (Dh118.5m) as rev­enue climbed 3 per cent to just over 2 bil­lion riyals. The com­pany’s bot­tom line was also boosted by a re­duc­tion in the roy­alty fee tel­cos pay on prof­its to the gov­ern­ment to 10 per cent, from 15 per cent.

“The im­pres­sive op­er­a­tional per­for­mance in re­port­ing five con­sec­u­tive quar­ters of profit demon­strates the suc­cess of the com­pany’s dig­i­tal growth strat­egy that has placed the com­pany in a much stronger fi­nan­cial po­si­tion and also seen its mar­ket cap­i­tal­i­sa­tion more than dou­ble over the past 12 months,” said Bader Al Kharafi, group chief ex­ec­u­tive and vice-chair­man. The com­pany’s mar­ket cap­i­tal­i­sa­tion stood at just over 7.75bn riyals at the end of last week.

Zain is a Kuwait-based mo­bile phone group whose Saudi arm is one of the three main mo­bile net­work oper­a­tors in the king­dom. The com­pany suf­fered losses last year as sub­scriber num­bers dwin­dled fol­low­ing the in­tro­duc­tion of new levies on ex­pa­tri­ate work­ers.

Rev­enues have picked up sub­stan­tially since though, and were 12.4 per cent higher year-on-year for the first nine months at 6.16bn riyals, mean­ing it made a net profit of 380m riyals for the pe­riod, com­pared to a 67m loss a year ear­lier.

Mr Al Kharafi ex­pressed op­ti­mism that the re­cent turn­around in the com­pany’s for­tunes would con­tinue, cit­ing the first-phase launch of com­mer­cial fifth-gen­er­a­tion ser­vices, which it has rolled out to 23 cities, with three more ex­pected to be added by the end of the year.

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