Zain Saudi Arabia posts $608m net loss in 2008
Telecom major earns gross revenues $135m, with active customers totalling over 2 million.
Zain Saudi Arabia posted a net loss of $608 million for the first four months of operations. The Gulf telecom major commenced its commercial operations in the Kingdom on August 26, 2008.
The company earned gross revenues of SAR 505,196m ($135m), with active customer numbers totalling 2.01m, representing an impressive seven percent market share of mobile users in the Kingdom.
A company release informed that it earned a gross profit of $4.27m (SAR 16 million) and a net loss of $608m (SAR 2,278 Billion), reflecting only four months of revenue, yet 18 months of start up and operating costs inclusive of the Initial Public Offering and the launch / preliminary branding campaigns, which amounted $112m (SAR 418 million).
The telecom operator's 3G technology enabled network is operating at optimal levels and is currently capable of serving five million customers the company said.
Dr Saad Al Barrak, Zain Group CEO said: “We expect that the huge investments in the brand and network to date will see even better results for 2009 and beyond. Our financial targets have been meticulously laid out and we expect the company to be profitable within a 3 year time frame.”
Zain secured the third GSM licence in the Kingdom of Saudi Arabia in 2007 for an investment of $6.1bn. In February 2008 the company completed its IPO that saw 8.5m subscribers request for their share of the 700m shares (50% of the company’s capital) on offer, raising $1.87 bn (SAR 7 billion). According to the company release, the telecom player now covers 95% of the populated area with 15 major highways and 44 cities and the remaining through a national roaming agreement. The company has invested over $1.5bn in network rollout to date.
Dr Marwan Alahmadi, CEO of Zain in Saudi Arabia, “Given our strong financial structure and expansionary plans to cover 100% of the Kingdom, Zain Saudi Arabia has several means of financing available to further expand our modern network such as Islamic Murahaba and other conventional financing.”