Telecom operator makes net profit of over $251m, missing analysts' estimates
Kuwaiti telecom operator Zain reported a 1 percent rise in quarterly profit on Monday, missing analysts' estimates.
Zain said it made net profit of KD70.97m ($251.58m) in the three months to June 30. That compares to profit of KD70.26m in the prior-year period, the company said in a bourse statement.
Analysts forecast average profit of KD76.9m, in a Reuters poll.
The former monopoly, which operates in seven countries, made a first-half net profit of KD141.8m, up from KD140.2m in the same period a year ago
In Kuwait, Zain competes with Wataniya, a unit of Qatar Telecom, and Viva, an affiliate of Saudi Telecom Co. The operator's Iraq and Sudan units account for about two-thirds of its subscribers and 59 percent of revenue, according to its first-quarter results.
Zain has raised its stake in loss-making unit Zain Saudi, oversubscribing to the affiliate's $1.6 billion rights issue following a tepid response from other shareholders.
That raised Zain's stake in Saudi Arabia's No. 3 operator to 37 percent from 25 percent, marking a reversal in strategy for the Kuwait firm whose attempt to sell its entire holding failed last year.
Zain Sudan aims to add 1 million subscribers in 2012, but earnings gains will be offset by weaker operating margins due to higher taxes and a growing economic crisis, its chief executive told Reuters in June.
Last week, Zain told Reuters earlier it will not book an impairment in the third quarter for its key Sudan unit after the Sudanese pound was devalued by 40 percent in a move that cuts the dollar value of the subsidiary's earnings.
Shares in Zain, which has mobile licences in Kuwait, Saudi Arabia, Bahrain, Lebanon, Sudan, Iraq and Jordan, stood at 680 Kuwaiti fils on Monday.