Currency fluctuations hit Zain Group's profits

Year-on-year profits dip by 4.1% in nine months to September 30
Nabeel Bin Salamah said the results for the nine months to September 30 were encouraging.
Nabeel Bin Salamah said the results for the nine months to September 30 were encouraging.


Kuwait’s Zain Group has reported consolidated revenues of KD 974.6 million ($3.5 billion) for the first nine months of the year, a decline of 1.2% compared to the same period in 2011.

The telco, which is present in eight countries in the Middle East and Africa, posted a net profit of KD201.6 million ($722.2 million), down 4.1% on the same period in 2011.

The company’s consolidated EBITDA amounted to KD 437.3 million ($1.57 billion) over the nine month period, a drop of 1.6% compared to the same period in 2011, reflecting a stable EBITDA margin of 44.87 %.

Zain blamed the decline in revenues on currency fluctuations in the nine-month period. The telco said that without the “currency translation impact” it would have reported growth of 1.5% and 0.7% year-on-year in revenues and EBITDA respectively.

Assad Al Banwan, chairman of the board of directors, Zain Group, said: “The group’s overall performance during the nine months to the end of September 2012, has been encouraging. Earlier in the year we identified the difficult economic conditions being faced in many of the markets in which we operate, and despite these adverse conditions, we have been able to produce results that show stability and consolidation year-on-year.

He added: “It should be noted that during this period Zain Group operations came under significant pressure with respect to extreme currency fluctuations in some of the markets in which we operate. These fluctuations alone cost Zain approximately $146 million, but despite this, we were still able to report solid operating results for the period.”

Nabeel Bin Salamah, CEO, Zain Group, said: “Operationally, the group’s results for the nine months to 30 September, 2012 are encouraging given the evidence they offer of Zain’s resilience and positive momentum. The increase in our EBITDA margin is proof that our efficiency drive across the Group is reaping positive results, and we shall look to continue to drive down costs in the periods ahead.”

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