Mobile Telecommunication Company Saudi Arabia “Zain KSA” announces its Annual Consolidated Financial Results for the Year Ending on 2020-12-31

Sunday 21 February 2021

 

ELEMENT LIST CURRENT YEAR PREVIOUS YEAR % CHANGE
Sales/Revenue 7,927 8,386 -5.592
Gross Profit (Loss) 5,445 5,969 -8.778
Operational Profit (Loss) 1,002 1,511 -33.686
Net Profit (Loss) after Zakat and Tax 260 486 -46.391
Total Comprehensive Income 182 384 -52.604
Total Share Holders Equity (after Deducting Minority Equity) 8,729 4,103 112,746
Profit (Loss) per Share 0.379 0.716  

All figures are in (Millions) Saudi Arabia, Riyals

 

 

ELEMENT LIST EXPLANATION
The reason of the increase (decrease) in the net profit during the current year compared to the last year is Zain KSA continues to record net profit for 4 years in a row despite the outbreak of Covid-19.
Zain KSA recorded a net profit of 260 million for the year ended 2020 as compared to a net profit of 485 million in 2019, resulting a net decrease in the net profit by 46.42%.
The reason for the decrease in the net profit is mainly due to:
- Decrease in revenue by 5.6% due to the cumulative impact of the pandemic which led to a minimal numbers of visitors for Umrah, limiting Hajj to local pilgrims in addition to the reduction of mobile termination rate in the 2nd half of 2020
- The cost of revenue has increased by 2.2% which results in decrease of the gross profit by a cumulative impact of 8.8%
- The company managed to partially absorb negative impact on the net profit by decreasing Opex by SAR 136 million.
-Depreciation and amortization increased by SAR 128 million as a result of the capex investment.
-Finance cost decreased by SAR 146 million due to the decrease in Sibor and Libor as well as from the proceed of the rights issue.
The refinancing of the Murabaha agreement has led to a gain on modification under IFRS9 accounting treatment for the amount of SAR 136 million
 
Statement of the type of external auditor's report Unmodified opinion
Reclassification of Comparison Items Certain comparatives figures have been reclassified to conform with the current year’s presentation
Additional Information Zain KSA was able to reduce its accumulated deficit to SAR 54 million for 2020 representing 0.60. % of its Share Capital of SAR 8,987 million compared to SAR 1,608 million for 2019 representing 27.5% of its Share Capital of SAR 5,837 million. This reduction is due to the reduction of the share capital by SAR 1,350 million to absorb the accumulated losses and net profit recorded for the year.
During the last quarter the Company has increased its share capital by issuing additional share capital of SAR 4,500 million.
The company released certain provision in the fourth quarter of 2020 with a net impact of SAR 149 million
Total capex investment for the full year 2020 was SAR 2.9 billion, to further expand the 5G network, enhance the quality of services provided to customers while increasing their reach and accessibility.
These results are a testament to the success of the companiy’s operational strategy and its attainment of a balanced financial approach that comes in line with a comprehensive capital restructuring, in addition to continually implementing the operational strategy based on reducing operational costs and enhancing fiscal governance in spite of the challenges imposed by the global coronavirus outbreak that has impacted all companies and sectors.
 

 

 

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