Kuwait Zain Q2 net profit falls 14%

Mergers, Acquisitions and Financial Results

Kuwaiti telecommunications operator Zain reported a 14% fall in its second-quarter net profit on Sunday to 61 million dinars ($214 million), mainly because of a currency loss in Sudan, according to Reuters calculations based on its first-half earnings statement.

Zain said it made a first-half net profit of 113 million dinars. The company had reported a first-quarter profit of 52 million dinars.

Consolidated revenues totalled 612 million dinars in the first half.

Zain said it added 3 million new customers over the past 12 months, raising its customer base to 44.4 million. Customers increased 11% in Kuwait to 2.4 million, by 12% in Saudi Arabia to 8.3 million, and by 8% in Iraq to 13.9 million.

Currency movements, mainly depreciation of Sudan's currency, cost Zain $347 million in revenues and $80 million in net profit during the first half, it said.

However, a new telecommunications law removing corporate income tax for three years was introduced in Sudan last month, which will help Zain's financial position in the country, it added.

Also last month, Saudi Arabia's government agreed to postpone payment of Zain's obligations to it for seven years. The deferred payments are estimated to add up to $213 million per year, the company said.