Zain Group's Q3 profit declines by 10%

Revenues and profits rise in the first nine month of 2011
Unlike many of its regional peers, Zain Group saw a rise in profits in the first nine months of 2011.
Unlike many of its regional peers, Zain Group saw a rise in profits in the first nine months of 2011.

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Kuwait’s Zain Group has posted strong results for the first nine months of the year, but posted a 10% decline in profits for the third quarter of 2011.

The telco, which has been implementing a restructuring process in recent months, said that its year-on-year net income rose by 7% in the nine months ended September 30 to reach $762.5 million. Revenues rose by 2.2% in the same period to reach $3.6 billion. Earnings per share reached $0.20.

But the group's quarterly net profit declined by 10.1% in Q3 to reach $256 million, compared to $285 million in the same quarter last year.

The results appear to vindicate Zain Group’s decision to sell most of its African assets last year and to refocus its Middle East operations.

Year-on-year customer growth across all Zain operations was 17%. As of September 30, 2011, the company was serving 41.4 million active customers. The company has added 6.1 million new active customers over the past 12 months.

Asaad Al Banwan, chairman of the board of directors, Zain, said that the results justified the “many prudent decisions” adopted by the board that focused on maximising shareholder value.

“Despite intense competition and the lingering effects of the global economic crisis, the continuous growth in several key financial indicators is indicative of the successful operational efficiency drive implemented by the company,” he said.

“These nine-month results are all the more impressive when one considers that the net profit for the period was adversely affected by currency variances totaling $100 million.”

Nabeel Bin Salamah, CEO, Zain Group, added that the company had experienced significant growth in broadband revenues, particularly as a result of increased use of social networking sites and applications via smart phones and tablets.

“The gap between voice and data revenues as a percentage of total company revenues is diminishing and supporting ARPU levels,” he said.

 

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