Tuesday 1 August 2017
Zain Saudi Arabia reports continued strong results.
Zain Saudi Arabia reported its second consecutive quarterly net profit and its first ever, half year net profit for the period ending 30 June 2017. Data services growth leveraging the advanced 4.5G LTE network, prudent management of operational costs and the effect of the 15 years license extension were the main contributing factors to the positive performance of the company.
Key performance indicators for the 2nd Quarter 2017:
Compared to Q2 2016, Zain Saudi Arabia recorded:
Revenues grew by 8% Year-on-Year in Q2 2017 reaching SAR 1,865 million compared with SAR 1,727 million in Q2 2016.
Q2 2017 revenues compared with SAR 1,919 million for the first quarter of 2017 reflect a slight decrease of 3% attributable to further subscriber rationalization due to biometric initiatives, seasonality and lower handset sales.
The company recorded a significant 70% increase in EBITDA to reach SAR 632 million during Q2 2017 up from SAR 372 million during Q2 2016 with an EBITDA margin reaching 34% compared to 22% in Q2 2016. This improvement reflects the positive effects of management’s efforts in driving efficiencies and optimizing the company cost structure.
Zain Saudi Arabia also reported a 13% increase in gross profit to reach SAR 1,259 million for Q2 2017, reflecting a gross margin of 67%, up from SAR 1,113 million and 64% gross margin in Q2 2016, while gross profit slightly decreased by 3%, from SAR 1,291 million from the previous quarter.
A much-improved operational income of SAR 235 million was recorded for Q2 2017, compared to an operational loss of SAR 108 million in Q2 2016.
The company announced its second sequential quarter of net profit ever in Q2, 2017, amounting to SAR 8 million, compared to net losses of SAR 328 million in Q2, 2016.
Commenting on these results, HH Prince Naif bin Sultan bin Mohammed bin Saud Al Kabeer, Chairman of the Board of Directors of Zain Saudi Arabia said,
“The Saudi market faces ongoing challenges in terms of decreasing total number of subscribers and increased competition. I am pleased to see the company reporting solid financial results for two consecutive quarters and the best, half yearly net profit, since the company’s inception”.
HH Prince Naif continued “The strong performance we witnessed in this quarter and the first 6 months of 2017 are attributed to the ongoing focus to improve the company’s data services and data monetization, marketing and customer service initiatives, increase in operating efficiencies and the positive effect of the license extension by an additional 15 years.”
HH Prince Naif added “During the second quarter, Zain also successfully secured additional 1800MHz spectrum which is critical to the delivery of high quality data services across the Kingdom. Strategic expansion of our network’s coverage and capacity is important to improving our brand image and increasing customer satisfaction”
Mr. Peter Kaliaropoulos, Chief Executive Officer of Zain Saudi Arabia said,“Zain’s continued strong performance reflects our transformational efforts to evolve as a market leading data services operator. We continue to focus on quality of service resulting from investments in our advanced 4.5G LTE network and, best value to our customers from improved operational efficiencies”
“We continue to implement our turnaround program despite the severe rationalization in the number of subscribers in the market which resulted in 6.5 million fewer subscribers in the last 12 months. Zain has retained its market share and continue to focus on increasing the “share of wallet” from our customer base, reducing churn and implementing a disciplined, operational efficiencies program to reduce expenditures”
The CEO continued “Customer satisfaction is an important aspect of our strategy with Zain consistently recording both, the lowest overall amount of monthly complaints from the 3 leading operators escalated to CITC and the highest resolution rate based on CITC reported figures. Ongoing improvements in customer satisfaction are being pursued as customer expectations are always increasing”.
He added “Delivering faster and more reliable data experiences to our customers is at the core of our operations. We will achieve such goal by continuing to carefully invest in the expansion of our advanced 4.5G LTE network and utilizing the additional [20MHz (10+10)] spectrum we acquired in the 1800 MHz frequency band”.
We also continue to explore opportunities with selected partners, to complement our wireless services portfolio and introduce high speed broadband services based on the latest, advanced fiber technology”
Mr. 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 tough market challenges in H2 2017, reflecting contraction of the customer base, increased competitive activity from existing and potentially new operators and general economic conditions. We remain focused on our strategic priorities to continually improve all aspects of our operations.”
The Chairman, HH Prince Naif stated that “the Board of Directors are appreciative that such strong results were delivered at the end of Q2, reflecting the efforts, dedication and leadership of the entire Zain Saudi Arabia team and the continued support of Zain Group”