Zain H1 profit hit by flailing Sudanese currency

Zain H1 profit hit by flailing Sudanese currency

29 JUL 2013

Zain, the Kuwaiti-headquartered firm with mobile operations in eight markets across the Middle East and Africa, said the weakening Sudanese pound wiped out the equivalent of $80 million from net profit and shrank its top line by $347 million during H1 2013.

According to Reuters’ calculations – the operator does not give a quarterly breakdown in its half-year earnings statement – Zain’s year-on-year Q2 net profit fell 14 per cent, to KWD61 million ($214 million).

According to data compiled by Dow Jones, Zain notched up sales of KWD313 million for Q2 2013, down slightly from the KWD338 million during the same period a year earlier.

First half net income was $397 million on sales of $2.12 billion.

“Although we are frustrated with the adverse foreign currency exposure predominantly in Sudan, where the local currency fell by 51 per cent against the US dollar over the last 12 months, we have not let this come in the way of our efficiency and innovation drives,” said Scott Gegenheimer, the group’s chief executive, in statement.

More encouragingly, Zain’s mobile data revenue was up 19 per cent in the first half. Mobile data now accounts for 13 per cent of group revenue.

Moreover, LTE is in commercial service in Bahrain, Kuwait and Saudi Arabia, which is helping customer acquisition (particularly in Saudi Arabia).

During the first half, Zain added 3 million new customers year-on-year – a 7 per cent increase – taking the group’s total subscriber base up to 44.4 million.

A more favourable regulatory environment in the Republic of Sudan will also be welcome. A new Telecommunications Tax law, introduced in mid-June 2013, removes 30 per cent corporate income tax for a period of three years. The law was backdated to 1 January 2013.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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