Zain Saudi continues to grow, records profitability for second straight quarter – Net profit reaches SAR 53 million for H1 2017
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KUWAIT CITY, Riyadh, Aug 2: Zain Saudi Arabia (Zain KSA) reported its second consecutive quarterly net profit and its first ever, half year net profit for the period ending 30 June 2017. Data services growth leveraging the advanced 4.5G LTE network, prudent management of operational costs and the effect of the 15-year license extension were the main contributing factors to the positive performance of the company.
Key performance indicators for the 2nd quarter of 2017 when compared to Q2 2016, Zain KSA recorded:
* Revenues of SAR 1.865 billion, up 8%
* Gross profit of SAR 1.259 billion, up 13%
* EBITDA of SAR 632 million, up 70%
* Operational income of SAR 235 million
* Quarterly net profit amounting to SAR 8 million, (six-month net profit of SAR 53 million)
Bader Nasser Al Kharafi, Zain Group Vice-Chairman and CEO; and Vice-Chairman of Zain Saudi Arabia commented: “The strong performance of this promising operation in the first six months of 2017 are attributed to prudent management in implementing the turnaround program that focuses on operating efficiencies, network upgrades, customer service and data monetization initiatives combined with the positive effect of the license extension by an additional 15 years.”
For the second quarter of 2017, Zain KSA witnessed an 8% increase in revenues to reach SAR 1.865 billion. Impressively, Zain KSA recorded a significant 70% increase in EBITDA to reach SAR 632 million during Q2 2017 up from SAR 372 million during Q2 2016 with an EBITDA margin reaching 34% compared to 22% in Q2 2016. This improvement reflects the positive effects of management’s efforts in driving efficiencies and optimizing the company cost structure.
Zain KSA also reported a 13% increase in gross profit to reach SAR 1.259 billion for Q2 2017, reflecting a gross margin of 67%. A much-improved operational income of SAR 235 million was recorded for Q2 2017, compared to an operational loss of SAR 108 million in Q2 2016.
Notably, the company announced its second sequential quarter of net profit ever in Q2, 2017, amounting to SAR 8 million, compared to net losses of SAR 328 million in Q2, 2016. The first six-month of 2017 net profit recorded by the operation was SAR 53 million.
Al Kharafi noted, “The Saudi market faces ongoing challenges in terms of decreasing total number of subscribers due to biometric requirements which resulted in 6.5 million fewer subscribers in the last 12 months and increased competition. During the second quarter, Zain KSA also successfully secured additional 1800MHz spectrum which is critical to the delivery of high quality data services across the Kingdom. Strategic expansion of our 4.5G LTE network’s coverage and capacity is important to delivering faster more reliable data experiences and increasing customer satisfaction resulting in improving our brand image.”
Furthermore, Al Kharafi said, “Zain has retained its market share and continues to focus on increasing the “share of wallet” from our customer base, reducing churn and implementing a disciplined, operational efficiencies program to reduce expenditures.”
Al Kharafi added, “Zain KSA continues to explore opportunities with selected partners, to complement our wireless services portfolio and introduce high speed broadband services based on the latest, advanced fiber technology.”
Al 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. We remain focused on our strategic priorities to continually improve all aspects of this key strategic operation for Zain Group.”
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