Zain sees profit slip 17% in first nine months

16 Nov 2009

Kuwait-based mobile group Zain has posted net profit of KWD195.7 million (USD677.1 million) for the first nine months of 2009, a 17% year-on-year drop as a result, among other things, of a foreign exchange loss equivalent to around USD130 million. Company CEO, Saad Al Barrak, said: ‘The global economic crisis, unfavourable foreign currency fluctuations, particularly in many of our African operations coupled with reduced interest income and investment income plus higher financing costs, have had an significant impact on the company’s overall profit.’ Revenues for the nine months ended 30 September 2009 totalled KWD1.78 billion, a 28% growth on the previous year. Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 37% year-on-year, up to KWD757.3 million. Al Barrack added: ‘The company continues to post impressive growth in several key operational and financial indicators as is evident by the increases of our customer numbers, consolidated revenues, EBITDA, EBITDA margin and earnings before interest and tax (EBIT). This is a result of our vast and capital intensive network expansion and marketing programmes that are attracting new customers and further enhancing our young award winning Zain brand.’ According to TeleGeography’s GlobalComms Database Zain Group added 15.5 million net new customers to its networks in the twelve months ended 30 September 2009, giving it a consolidated customer base of 71.8 million.

In a related story, Chris Gabriel, CEO of Zain’s African division, told reporters that the company’s operations across the continent were not for sale, South Africa’s Business Day reports. Gabriel said: ‘Zain Africa is not for sale. We are focused on our objective of becoming a top ten mobile player globally by 2011. There is absolutely no lack of focus in Africa. There is always great appetite for expansion.’ He did concede however that any decision ultimately rested with the company’s shareholders, adding: ‘Whether shareholders decide to sell is entirely up to them. Shareholder matters are outside the scope of my responsibility.’ Speculation over the potential sale of Zain’s African division, which has operations in 16 countries, has persisted despite the collapse of a USD12 billion deal to sell the unit to French conglomerate Vivendi in July.

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