Wednesday 12 April 2017
Zain Saudi Arabia records first-ever quarterly profit in Q1, 2017
Zain Saudi Arabia reported its first ever quarterly net profit for the three months ending March 31, 2017 driven by revenue growth and optimization of its operational cost structure.
Key performance indicators for the first quarter Q1, 2017:
Compared to Q1, 2016, Zain Saudi Arabia reported:
• Revenues of SAR 1,919 million, up 9%.
• Gross profit of SAR 1,291 million, up 19%.
• EBITDA of SAR 665 million, up 49%.
• Operational income of SAR 273 million
• First ever quarterly net profit amounting to SAR 45 million
Revenues grew by 9% in Q1, 2017 reaching SAR 1,919 million compared with SAR 1,765 million in Q1, 2016. This also represented a 7% increase in revenues from SAR 1,801 million generated for the fourth quarter (Q4) of 2016.
The company recorded a significant 49% increase in EBITDA to reach SAR 665 million in Q1, 2017, up from SAR 445 million in Q1, 2016, and a 36% increase from SAR 490 million in Q4, 2016. EBITDA margin rose to 35% for Q1, 2017 up from 25% in Q1, 2016, and 27% in Q4, 2016.
Zain Saudi Arabia also reported a 19% increase in gross profit to reach SAR 1,291 million for Q1, 2017, reflecting a gross margin of 67%, up from SAR 1,086 million and 62% gross margin in Q1, 2016. Gross profit also increased by 13%, up from SAR 1,142 million and 63% gross margin in Q4, 2016.
The company recorded operational income of SAR 273 million in Q1, 2017, compared to operational loss of SAR 32 million in the same quarter of 2016. operational income increased by 212% compared to SAR 87 million in Q4, 2016.
Significantly, Zain Saudi Arabia announced its first quarterly net profit ever in Q1, 2017, amounting to SAR 45 million, compared to net losses of SAR 250 million in Q1, 2016 and SAR 135 million losses in Q4 2016.
Commenting on the operational results, HH Prince Naif bin Sultan bin Mohammed bin Saud Al Kabeer, Chairman of the Board of Directors of Zain Arabia said, “Despite the massive challenges we faced in a very competitive market, I am pleased to see the company reporting positive financial results and the first quarterly net profit ever. The results reported this quarter are attributed to the ongoing focus to the improvement of the company’s operations and the positive effect of the license extension by an additional 15 years.”
Prince Naif continued, “Zain was also chosen this quarter to execute the first high-speed (10 Mbps) Mobile Broadband project in rural areas, following submission of competitive bids to the Communications and Information Technology Commission (CITC). This project comes within the bounds of the sector’s objectives with respect to the National Transformation Program 2020, and we are fully aligned and committed to supporting this worthy objective. We are also grateful to CITC for awarding such project.”
“We remain dedicated to play our role in Vision 2030 as a national ICT pioneer. Bearing this in mind, Zain participated in Mobile World Congress in Barcelona, where it highlighted the progress being achieved in the development of the Kingdom’s digital infrastructure, and the marked improvement of the overall customer experience through the signing of agreements with Huawei, Ericsson, and Nokia to bring the latest and most advanced technologies to Saudi Arabia” Prince Naif concluded.
Peter Kaliaropoulos, Chief Executive Officer of Zain Saudi Arabia commented, “Our strategic priorities are focused on driving value and growth from our core mobile business, delivering better and consistent customer experiences and finding growth from opportunities close to our core and ones emanating from the recently awarded unified license”
Kaliaropoulos continued, “We are focusing on increasing the “share of wallet” from our customer base, reducing churn and implementing disciplined operational efficiencies to reduce expenditure. Such initiatives resulted in revenue growing by 7% and EBITDA by 36% compared to Q4 2016.”
“Whilst we aspire to keep improving network quality for all our loyal customers, we will do so by selective investment in capital expenditure and working in partnership with technology companies to grow the reach and quality of the network to satisfy the ever-growing demand for faster and more reliable data experience.”
Kaliaropoulos concluded, “The efforts of the entire Zain team in Saudi Arabia, and the continued support from the Board of Directors, our shareholders and Zain Group, are sincerely appreciated. We will continue to face significant market challenges in 2017, especially since the market contracted by 4.9 million subscribers in 2016. However, we remain cautiously confident and clearly focused on our strategic priorities and strive to continually improve all aspects of our operations.”
Zain’s strong performance in Saudi Arabia follows the recent announcement by London based brand valuation consultancy, Brand Finance, that the Zain brand has been ranked as the second most powerful home-brand in the Middle East, following the publication of the Middle East’s 50 most valuable brands.