Zain earnings up slightly on new users

Kuwaiti telco posts 3.9% rise in net income to $312.7mn in Q4, second straight quarterly profit growth.

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By  Ola Galal Published  January 29, 2008

Mobile Telecommunications Company (Zain), the third-largest Arab telecom operator by market value, posted its second straight quarterly profit growth in the fourth quarter as it added new users across the region.

Kuwait-based Zain posted a 3.9% rise in profit to 85.33 million dinars ($312.7 million) in the three months to December 31, compared with 82.14 million dinars a year earlier, newswire Reuters calculated from full-year data the company released.

The quarterly profit beat one of two analyst forecasts in a Reuters survey last month of 96.91 million dinars and 79.60 million dinars.

Zain, which has revised its 2006 profits, made 320.45 million dinars or 172 fils per share in 2007, up 8.6% from 2006, the company said in a statement carried by state news agency Kuna. There are 1,000 fils per dinar.

Growth in the full year was driven by a 29.3% rise in revenue to 1.68 billion dinars as total subscribers in the Middle East and Africa hit almost 40 million, it said.

Zain had more than 36 million customers on September 30, indicating a net addition of about four million in the three-month period.

The company said it was proposing a 2007 cash dividend of 90 fils per share and a bonus share issue of one free share for every two held by investors.

Zain said last month it would raise its capital by 75% by selling shares to existing investors, aiming to raise around $4.4 billion to finance expansion overseas as competition grows in its home market.

Zain, which operates in about 20 countries in the Middle East and Africa, has been seeking investment opportunities abroad to counter tough competition at home, where Saudi Telecom Company won a bid to set up a third mobile phone firm.

It also competes with National Mobile Telecommunications Company (Wataniya) at home.

Zain had reported a decline in profit in the second quarter for the first time in at least two years because of tougher competition in African nations such as Sudan. (Reuters)

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