Zain KSA cuts its losses by 21% in Q1

Telco continues to move towards profitability as revenues rise
Zain KSA continued to reduce its losses in Q1.
Zain KSA continued to reduce its losses in Q1.

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Zain Saudi Arabia increased its revenues to SR 1.522 billion ($406m) in Q1 2012, a rise of 3% on the same period in 2011.

Net losses also decreased by 21%, to SR 420 million in Q1, from SR 532 million in the first quarter of 2011. The improvement was a result of lower financing costs, the telco said.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) during the first quarter were SR 243 million, compared to SR 154 million for the same quarter last year, representing an increase of 58%.

Operating losses decreased by 18% from SR 233 million in the first quarter of 2011 to SR 191 million in first quarter 2012 as the company continued to streamline its organisational structure, operations and spending.

HRH Prince Dr. Hussam bin Saud bin Abdul Aziz, chairman of Zain KSA, said: “The improvement in our key financial metrics in the first quarter is encouraging and reflects the company’s continued progress in achieving its strategic goals following the strategic review carried out towards the end of 2011."

In February, Zain KSA, Saudi Arabia's third mobile operator, said that it was in talks with lenders to refinance its $2.5 billion syndicated loan that matures in July. In its Q1 results statement, the telco added that its board and management team were  working on the company’s planned capital restructuring with the "full support" of all of its founding shareholders, including support from Zain Kuwait.

"Following the company's announcement in January 2012 of the successful extension of the maturity of its current $2.6 billion Murabaha financing facility to 27th July 2012, the company is finalising documentation and arrangements towards the refinancing of the said facility which is to be replaced by a 5-year, medium term facility," Zain Saudi Arabia said in a statement.

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