01/08/2017 05:30 AST
Zain Saudi Arabia reported its second consecutive quarterly net profit and its first ever, half year net profit for the period ending June 30, 2017. Data services growth leveraging the advanced 4.5G LTE network, prudent management of operational costs and the effect of the 15 years license extension were the main contributing factors to the positive performance of the company.
For the 2nd quarter 2017, revenues rose 8% to SR1,865 million, while gross profit climbed 13% to SR1,259 million, compared to Q2 2016.
EBITDA reached SR 632 million, jumped 70%, and operational income recorded SR235 million. Quarterly net profit amounted to SR 8 million.
Revenues grew by 8% Year-on-Year in Q2 2017 reaching SR1,865 million compared with SR1,727 million in Q2 2016.
Q2 2017 revenues compared with SR1,919 million for the first quarter of 2017 reflect a slight decrease of 3% attributable to further subscriber rationalization due to biometric initiatives, seasonality and lower handset sales.
The company recorded a significant 70% increase in EBITDA to reach SR 632 million during Q2 2017 up from SR372 million during Q2 2016 with an EBITDA margin reaching 34% compared to 22% in Q2 2016. This improvement reflects the positive effects of management's efforts in driving efficiencies and optimizing the company cost structure.
Zain Saudi Arabia also reported a 13% increase in gross profit to reach SR1,259 million for Q2 2017, reflecting a gross margin of 67%, up from SR1,113 million and 64% gross margin in Q2 2016, while gross profit slightly decreased by 3%, from SR1,291 million from the previous quarter.
A much-improved operational income of SR235 million was recorded for Q2 2017, compared to an operational loss of SR108 million in Q2 2016.
The company announced its second sequential quarter of net profit ever in Q2, 2017, amounting to SR8 million, compared to net losses of SR328 million in Q2, 2016.
Commenting on these results, Prince Naif bin Sultan bin Mohammed bin Saud Al Kabeer, Chairman of the Board of Directors of Zain Saudi Arabia said,
"The Saudi market faces ongoing challenges in terms of decreasing total number of subscribers and increased competition. I am pleased to see the company reporting solid financial results for two consecutive quarters and the best, half yearly net profit, since the company's inception".
Prince Naif added: "The strong performance we witnessed in this quarter and the first 6 months of 2017 are attributed to the ongoing focus to improve the company's data services and data monetization, marketing and customer service initiatives, increase in operating efficiencies and the positive effect of the license extension by an additional 15 years."
"During the second quarter, Zain also successfully secured additional 1800MHz spectrum which is critical to the delivery of high quality data services across the Kingdom. Strategic expansion of our network's coverage and capacity is important to improving our brand image and increasing customer satisfaction," he further said.
Peter Kaliaropoulos, Chief Executive Officer of Zain Saudi Arabia, said "Zain's continued strong performance reflects our transformational efforts to evolve as a market leading data services operator. We continue to focus on quality of service resulting from investments in our advanced 4.5G LTE network and, best value to our customers from improved operational efficiencies."
"We continue to implement our turnaround program despite the severe rationalization in the number of subscribers in the market which resulted in 6.5 million fewer subscribers in the last 12 months. Zain has retained its market share and continue to focus on increasing the "share of wallet" from our customer base, reducing churn and implementing a disciplined, operational efficiencies program to reduce expenditures."
"Customer satis
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