Sunday 8 November 2020
“Zain KSA” scores SAR 224 million net profit
Revenue growth up by 2% in the 3rd quarter
Zain KSA has maintained its stellar financial performance for the 9th consecutive quarter, posting net profits of SAR 224 million during the first nine months of the year. The company's revenue grew to SAR 1,928 million in Q3 2020, up from SAR 1,889 million in Q2 2020 represented by 2% increase.
Accumulated losses continued to drop reaching SAR 1,384 million at the end of Q3, and during the fourth quarter of the current year, Zain KSA’s announced that the extraordinary general assembly approved the company’s capital restructuring, increasing it to SAR 8,987 million. Consequently, due to the net profit achieved during the third quarter and the capital restructuring in the fourth quarter of the year, the majority of the accumulated losses were amortized and currently stand at only SAR 34 million.
Despite the challenges posed by the COVID-19 pandemic, which weighed down on the global and local economic sectors, Zain KSA managed to maintain good profitability, overcoming many of the challenges that emerged this year. The company succeeded in cutting down its operational expenditure by SAR 41 million as a result of improved optimization of its expenses in the current circumstances. As such, the company further reduced the cost of financing by an amount of SAR 26 million, in addition to gains attained from its latest Murabaha facility rescheduling through which an amount of SAR 136 million was rearranged.
Commenting on these results, Prince Nayef bin Sultan Al Kabeer Chairman of the Board of Directors, said “The third quarter of this year brought Zain KSA major financial developments, which came within the framework of the company’s long-term operational strategy and its clear goals. The quantum leaps the company has achieved in terms of quality investments, and in terms of financials, which transformed Zain KSA into a profit-making company over three years ago, gave it strong impetus, enabling it to dodge the current challenges, those related to the ICT sector as well as those facing the wider economy due to the fallouts of COVID-19. Accordingly, we continued to work to meet the growing demand for telecoms and internet services in the Kingdom and to improve the customer experience of our businesses and individual users by utilizing the latest technologies. By doing that, we have continued to contribute to serving Saudi Vision 2030’s goals by improving the quality of life in the Kingdom through supporting digital transformation, enabling economic diversification and providing job opportunities.”
For his part, Zain KSA’s Chief Executive Officer, Eng. Sultan bin Abdulaziz Al-Deghaither, said Zain KSA has gone beyond adapting with COVID-19, to embracing efficient operational and financial solutions. "On the operational level, we followed up on plans to develop and expand services and products, namely our world-class 5G network which today covers 50 cities enabled by 4,600 towers. This geographic expansion was also paired with upgraded service quality as we were the first telecom operator world-wide to provide its customers with the carrier aggregation feature which enables internet speed to reach 2.4 Gbps. We will continue to expand our 5G coverage on the largest scale, targeting new cities and a greater expansion in those that are already covered, and we are proud in publishing and updating coverage maps on a weekly basis on the company's website. This ensures transparency and credibility in keeping our customers posted on the updates of Zain KSA’s 5G services in all the cities and regions across the Kingdom.”
Zain KSA has recently successfully signed an agreement for rescheduling its SAR 3.85 billion syndicated Murabaha financing facility with a consortium of banks, to five years ending in 2025, and refinanced it with facilities of up to SAR 6 billion, amount to be withdrawn later as per the company’s business requirements, with a much lower profit margin than before, and with better commercial terms. In addition, this agreement includes working capital facilities of one billion Saudi riyals for a period of five years, which secures additional liquidity to finance the company's business growth plans.
Zain KSA is the only telecom operator that covers all Saudi administrative regions, ranking in first place in 12 of the 13 of them, as per the Saudi Communications and Information Technology Commission’s quarterly report, “Meqyas”. The company also outperformed local telecom operators in the most popular e-games in Saudi Arabia, ranking first in 4 out of 5 games measured by the report (including Fortnite, FIFA20, APEX, and League of Legends), and maintained the fastest services in Zoom and Microsoft Teams apps.
These local results achieved by "Zain KSA" gained international recognition, represented by internationally acclaimed entities. Ookla, the global company behind the famous Speedtest website for measuring internet speeds worldwide, awarded Zain KSA the "Fastest Fixed Network Speed in the Kingdom" award. This global acclamation of Zain’s accomplishments was trailed by numerous other prestigious awards, the most prominent of which being the Best Infrastructure Deployment award during the Telecom Review Leaders’ Summit 2019, and the Best Middle East Operator of the Year accolade for 2019 by reputed regional telecom publication CommsMEA.