Zain Saudi Arabia reports first ever full-year net profit

24/01/2018 09:44 AST

Zain Saudi Arabia has reported its first ever full-year net profit, amounting to SAR 12 million for the period ending Dec 31, 2017. This is a milestone achievement for the company since the commencement of commercial operations in Aug 2008. The success is attributable to Zain KSA's focus on the growth of data services, leveraging the operator's advanced 4.5G LTE network, ongoing focus on higher value customer acquisitions, prudent cost optimization and operational efficiencies, network investment in advanced technologies and the effect of the 15-year license extension.

Total revenues of SAR 7.3 billion were achieved despite a significant decline in international revenues amounting to SAR 693 million in 2017 primarily due to the impact of VOIP and lower number of prepaid customers. The decline was partially mitigated by growth in revenues derived from mobile broadband, post-paid voice and data packages and, growth in enterprise business.

Gross profits grew by 11.6 percent over the previous year to reach SAR 4,913 million in 2017. Gross profit margin at 67 percent also improved compared to 64 percent in the previous year. A much-improved operational profit of SAR 903 million was recorded for 2017, compared to an operational loss of SAR 54 million in 2016. For the 12 months in 2017, Zain Saudi Arabia recorded net profit of SAR 12 million, up substantially from a loss of SAR 979 million for the same period in 2016.

Commenting on the impressive full year results, Zain Group Vice-Chairman and CEO and Vice-Chairman of Zain Saudi Arabia Bader Al-Kharafi said: "The strong performance in all key financial indicators and notably the net profit that reflected a SAR 1 billion turnaround is attributed to the disciplined execution of our strategy to increase monetization of data and digital services and ongoing focus on the improvement of the company's operations and prudent efficiencies and optimization of its cost structure. Investment in 4.5G advanced mobile network technology and increased customer centricity and care equally contributed to best-ever performance."

"Zain Saudi for the first time since its launch delivered positive financial results based on healthy revenue growth, better margins and improved quality of service. It is an impressive outcome in the context of a very competitive market with fewer overall subscribers in 2017 and general decline in industry revenues," commented Kharafi.

"We also remain deeply committed to customers living in every part of the kingdom and to expanding high speed mobile internet to regional and remote communities in a partnership with Ministry of Communication an Information Technology (MCIT) as part of its Universal Service Fund (USF) program we commenced in 2017," continued Kharafi.

"The board is very proud of Zain's performance in 2017, which has also made a solid contribution to the local economy. We continue to contribute substantially to the National Transformation Program 2020, and are working with relevant authorities to implement initiatives that will contribute to achieving the objectives of Vision 2030," said Kharafi.

Peter Kaliaropoulos, Chief Executive Officer of Zain Saudi Arabia commented: "Whilst enduring significant competitive and structural challenges in the Saudi telecommunications sector, the team delivered remarkable results in 2017 in all facets of the business including the first ever net profit since the launch of the company in 2008." He added: "The ongoing transformation of Zain Saudi was underpinned by strong revenue growth from data services, dedicated customer care efforts, significantly improved network coverage, faster download speeds and, operational efficiencies."

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Kuwait Times