Zain Group's net profit falls 27% in Q1
Kuwaiti telecoms group blames currency fluctuations for decline
Zain Group suffered a 27% drop in net income in the first quarter of the year, which it attributed to a combination of currency fluctuations, its increased stake in Zain Saudi Arabia, and fierce competition across its markets.
The telco posted a net profit of $184m for the quarter, compared to $255m in the first quarter of 2012. The telco's profits rose 3% sequentially in the first quarter, Zain said.
The group's revenues fell 9.5% year-on-year to $1.06bn in Q1, while EBITDA declined 15.9% to $449m.
Zain Group's subscriber base rose 9.4% to 44.1m by the end of Q1. The group added 1.4m customers during the first three months of 2013 and is a market leader in six of its eight operations.
The company said that although its struggling Saudi Arabian unit continued to narrow its operating loss, Zain Group's increased ownership from 25% to 37% "pressures group operating results".
Scott Gegenheimer, CEO, Zain Group, added that currency fluctuations had also dented the telco's Q1 results. "Operationally our Group companies are performing well in local currency terms and despite intense competitive challenges, they are all attaining the targets set at the beginning of the year.
"The adverse effect on our financial results by the devaluation of the Sudanese pound, which fell by 53% against the US dollar over the last 12 months, is unavoidable as there is no effective hedge on the currency," he added.
On a more positive note, Gegenheimer pointed out that data revenues increased by 14% in the first quarter of the year, helping to offset declines from traditional voice and SMS revenues.