Kuwait based Zain has reported a 53 percent drop in its 3rd-quarter profits to KWD 41.19 million (US$144.3 million) from KWD 87.2 million a year ago.
For the first nine months of 2009, Zain Group recorded consolidated revenues of KWD 1.78 billion (US$6.169 billion), an increase of 24% compared to the first nine months of 2008. The company's consolidated EBITDA increased by 37% for the same period to reach KWD 757.3 million (US$2.624 billion). Consolidated Net Income reached KWD 195.7 million (US$677.1 million), a decrease of 17%.
Year-on-year customer growth on the two continents across which Zain operates was 28%, whereby the company is serving 71.8 million managed active customers as of September 30, 2009.
Chief Executive Officer of Zain, Dr Saad Al Barrak commenting on the nine months results, said: "The Company continues to post impressive growth in several key operational and financial indicators as is evident by the increases of our customer numbers, consolidated revenues, EBITDA, EBITDA margin and EBIT. This is a result of our vast and capital intensive network expansion and marketing programs that are attracting new customers and further enhancing our young award winning Zain brand".
Dr Al Barrak also noted however, that, "the global economic crisis, unfavorable foreign currency fluctuations, particularly in many of our African operations coupled with reduced interest income and investment income plus higher financing costs, have had an significant impact on the company's overall profit. Adding to these challenges are the associated 'start-up' capital and operational expenditures in two large and promising operations that were launched in the last 12 months, namely the Kingdom of Saudi Arabia and Ghana, as well increased fixed costs charges as a result of network expansion in many of our markets".
During this nine months period, foreign currency fluctuations have negatively impacted net profit by US$130 million.
Dr Al Barrak further added, "The nature of the nine months 2009 net income result is all the more impressive when one takes into account that during this period in 2008 we had an extraordinary gain of KWD26.6 million (US$99 million) from the successful Zambia IPO. This is an indication that operational net income growth is better than indicated for this period."