Currency loss in Sudan hits telecom operator's bottom line during second quarter
Kuwaiti telecommunications operator Zain reported a 14 percent fall in its second-quarter net profit on Sunday to KD61m ($214m), mainly because of a currency loss in Sudan, according to Reuters calculations based on its first-half earnings statement.
Zain said it made a first-half net profit of KD113m. The company had reported a first-quarter profit of KD52m.
Consolidated revenues totalled KD612m in the first half.
Zain said it added 3 million new customers over the past 12 months, raising its customer base to 44.4 million. Customers increased 11 percent in Kuwait to 2.4 million, by 12 percent in Saudi Arabia to 8.3 million, and by 8 percent in Iraq to 13.9 million.
Currency movements, mainly depreciation of Sudan's currency, cost Zain $347m in revenues and $80m in net profit during the first half, it said.
However, a new telecommunications law removing corporate income tax for three years was introduced in Sudan last month, which will help Zain's financial position in the country, it added.
Also last month, Saudi Arabia's government agreed to postpone payment of Zain's obligations to it for seven years. The deferred payments are estimated to add up to $213m per year, the company said.