Zain Group's net profit declines 14% in Q2
Currency fluctuations from Republic of Sudan erode earnings
Zain Group's net profits declined by 14% in the second quarter of 2013 to $213m, compared to $251m in the same period last year.
The Kuwait-based telco posted net revenues of $1.061bn in Q2, a decline of 12% compared to the same quarter in 2012.
Net profit for the first half of 2013 reached $397m. Earnings per share for the period stood at $0.10. Zain Group's revenues calculated for the first half of the year reached $2.12bn, and the company's consolidated EBITDA for the same period reached $935m, reflecting an EBITDA margin of 43.3%.
The group added 3m new active customers over the past 12 months to serve 44.4m subscribers as of June 30, 2013, reflecting a 7% growth rate.
Commenting on results for the first half of the year, Zain said that adverse currency fluctuations, mainly in the Republic of Sudan, cost the company the equivalent of $347m in revenues, $150m in EBITDA and $80m in net profit.
However, not all news from Sudan was bad. A new telecoms tax law introduced in the Republic of Sudan in mid-June 2013 removed the 30% corporate income tax for a period of 3 years. The law was backdated to January 1, 2013.
Group data revenues, excluding SMS and VAS, increased by 19% in the first half of the year. Data now accounts for 13% of all Zain's revenues.
Scott Gegenheimer, CEO, Zain Group, said: "Although we are frustrated with the adverse foreign currency exposure predominantly in Sudan, where the local currency fell by 51% against the US dollar over the last 12 months, we have not let this come in the way of our efficiency and innovation drives.
"We are transforming our business, and looking to improve our competitive positions in all the markets in which we operate by implementing strategies focusing on exploiting synergies between our operations, improving customer experience and by entering or partnering with adjacent businesses that complement our ability to better serve customers."