Zain Kuwait profit plunges 27% to KWD113m

29 Jul 2013

Kuwaiti telecoms company Zain Group has published its financial results for the six months ended 30 June 2013, reporting a 7.6% drop in revenues year-on-year to KWD612 million (USD2.15 billion) from KWD663 million, while data revenues increased by nearly 19% due to substantial investments in 3G and 4G Long Term Evolution (LTE) networks. The company booked a net profit of KWD113 million, down 27% from KWD155 million reported in 1H12, while EBITDA for the six months period reached KWD265 million. The negative results were partly due to foreign exchange currency losses predominantly in the Republic of Sudan, which reduced the group’s revenue by USD347 million, EBITDA by USD150 million and net profit by USD80 million for the six month period under review. However, the group expects that a new Telecommunications Tax law – which was introduced in Sudan in mid-June 2013, removing the 30% corporate income tax for a period of three years, will positively influence the group’s financial position.

In operational terms, Zain group reported 7% growth in its consolidated customer base, which reached 44.4 million users in 1H13. In Kuwait subscribers increased by 11% y-o-y to 2.4 million, while Bahrain reported a 36% surge in subscribers for the same period to June 2012. Iraq saw its customer base grow by 8% to 13.9 million, as its network was expanded to cover North Iraq. Meanwhile, Saudi Arabia contributed 8.3 million users to the total subscriber base, equivalent to 12% y-o-y growth, Sudan reported a total of 12.5 million users, while customers in South Sudan increased by 26%.

Zain Group’s chairman of the board of directors Asaad Al Banwan commented: ‘Zain Group continues to deal competently with the competitive challenges that it faces. It is encouraging to see an additional three million customers join Zain, a direct result of extensive investments in upgrading and expanding our networks coupled with attractive service offerings across our operations. This bodes well for the company’s future as our superior networks are supporting [the] management’s strategy to further exploit the infrastructure, driving efficiency and focusing on new investment opportunities and sources of incremental revenue including digital services, which have been growing at a phenomenal rate.’

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