Zain ‘stronger financially’ as profit jumps at Saudi unit
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.