Zain Q3 profit down 15pc; CEO to step down
Kuwait, October 21, 2012
Kuwaiti telecom operator Zain missed expectations with a 15 per cent fall in quarterly profit, hit by a foreign exchange loss.
The former monopoly, which operates in eight countries in the Middle East and Africa, also said on Sunday chief executive Nabeel bin Salama would not renew his contract when it expires in February.
Zain made a third-quarter net profit of KD59.7 million ($213 million), compared with a forecast for KD63.7 million in a Reuters poll. Revenue fell 5.4 per cent to KD311 million.
"During this (nine-month) period Zain Group operations came under significant pressure with respect to extreme currency fluctuations in some of the markets in which we operate," chairman Assad Al Banwan said.
That cost Zain the equivalent of $146 million, he said.
In Kuwait, Zain competes with Wataniya, a unit of Qatar Telecom (Qtel), and Viva, an affiliate of Saudi Telecom Company, while its Iraq and Sudan units accounted for 62 per cent of subscribers and 58 per cent of revenue, according to its first-quarter results.
Zain's Iraq unit plans to go ahead with a long-delayed stock market listing in Baghdad by early 2013 at the latest, its deputy chief executive said this month.
Under the terms of its licence agreement, Zain Iraq must launch an initial public offering of 25 per cent of its shares. Zain's holding in its Iraq unit will fall to 51 per cent from 76 per cent if the IPO is fully subscribed.
Zain shares ended flat on the day, to be down 18 per cent this year.-Reuters