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Zain extends earnings slump as Q3 profit falls 18 percent
October 26, 2015, 8:27 am

Zain, Kuwait's No.1 telecom operator by subscribers, reported an 18 percent fall in third-quarter profit on Sunday, extending a sustained earnings slump as increased taxes in Iraq and foreign exchange losses weighed on the bottom line.

The former monopoly, which operates in eight countries in the Middle East and Africa, made a net profit of 38 million dinars ($125.50 million) in the three months to Sept. 30, down from 46 million dinars in the year-earlier period, it said in a statement.

Two analysts polled by Reuters had forecast Zain would make a quarterly profit between 37.0 million dinars and 46.1 million dinars.

The firm had posted falling profits in 10 of the preceding 12 quarters, partly due to tougher domestic competition, service interruptions and higher costs in war-torn Iraq and foreign exchange volatility.

Zain said a 20 percent sales tax on mobile services in Iraq, introduced on August 1, had hurt its third-quarter profit.

Third-quarter revenue was 292 million dinars. This compares with 294 million dinars a year ago.

Zain's net profit in the first nine months of 2015 was 118 million dinars, down 27 percent from a year earlier.

The operator said foreign exchange losses as a result of a stronger dollar versus the dinar had reduced its profit for this period by $25 million, while the amortisation of recently acquired radio spectrum in Jordan and Iraq had also impacted its bottom line.

In Kuwait, Zain competes with Ooredoo Kuwait, a unit of Qatar's Ooredoo, and Viva, an affiliate of Saudi Telecom Co (STC).

Source: Reuters

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