Kuwait's Zain posts near-flat Q4 net profit

Former telecoms monopoly makes $180m in the three months to December 31
Kuwait's Zain posts near-flat Q4 net profit
GCC telecoms
By Reuters
Mon 27 Jan 2014 07:24 PM

Zain, Kuwait's No.1 telecommunications operator, reported near-flat fourth-quarter profit on Monday, missing analysts' estimates.

The former monopoly, which operates in eight countries in the Middle East and Africa, made a net profit of KD51 million ($180.59 million) in the three months to December 31, it said in an emailed statement.

This was up from KD50.5 million in the year-earlier period, Reuters data shows.

Two analysts polled by Reuters had forecast Zain would make a quarterly profit of between KD52.1 million and KD59.1 million.

Zain's full-year profit for 2013 was KD216.4 million, down from KD252.2 million in 2012.

Zain, which reported declining profits in the previous five quarters, had 46.1 million customers at the end of last year, up 8 percent from a year earlier.

Zain said foreign exchange revaluations wiped $149 million from its full-year profit, of which $6.3 million occurred in the fourth quarter.

This largely relates to Sudan, which devalued its currency by 35 percent last year. Tax reforms inKhartoum would help offset the company's foreign exchange hit, Zain said.

Sudan suspended a 30 percent income tax for telecom firms in mid-2013, replacing it with a 2.5 percent levy on revenue, Zain said.

"Factors outside of Zain's control such as an exceptional local currency devaluation in one key market, together with social instability in others continue to adversely affect our financial results," chief executiveScott Gegenheimer said in the statement.

Zain is the market leader in six of the eight countries in which it operates, including Iraq and South Sudan.

Violence in Iraq climbed back to its highest level in five years in 2013, while a rebellion broke out in South Sudan in December.

Data contributed 14 percent of Zain's full-year service revenue.

Annual revenue fell 3.3 percent to KD1.24 billion.

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