Mobile Telecommunication Company Saudi Arabia (Zain) announces the interim financial results for the period ending on 30-06-2018 (Six Months)
| Element | Current quarter | Similar quarter for previous year | % Change current | Previous quarter | % Change previous |
|---|---|---|---|---|---|
| Net profit (loss) | -38 | 8 | - | -77 | 50.65 |
| Gross profit (loss) | 1,193 | 1,259 | -5.24 | 1,157 | 3.11 |
| Operational profit (loss) | 179 | 235 | -23.83 | 143 | 25.17 |
| All figures are in (Millions) Saudi Arabia, Riyals | |||||
| Element | Current period | Similar period for previous year | % Change |
|---|---|---|---|
| Net profit (loss) | -115 | 53 | - |
| Gross profit (loss) | 2,350 | 2,550 | -7.84 |
| Operational profit (loss) | 323 | 508 | -36.42 |
| Earning or loss per share, Riyals | -0.2 | 0.09 | - |
| All figures are in (Millions) Saudi Arabia, Riyals | |||
| Element | EXPLAINATION |
|---|---|
| Reasons of increase (decrease) for quarter compared with same quarter last year | The change in the bottom line, from a net profit of SAR 8 million in Q2 2017 to a net loss of SAR 38 million during Q2 2018, is mainly due to the below reasons: - Decrease in revenues of 1% amounting SAR 18 million. Without the decrease of the interconnection rates, the revenues would have grown by 1% year over year. - Decrease in gross profit of SAR 66 million. - Increase in depreciation of SAR 39 million as a result of acquiring spectrum and additional property equipment whereby impact from spectrum is SAR 18 million. Worth mentioning, that distribution and marketing expenses decreased by SAR 42 million and general and administrative expense decreased by SAR 7 million as a result of the cost optimization. |
| Reasons of increase (decrease) for period compared with same period last year | The change in the bottom line, from a net profit of SAR 53 million during the first six month of 2017 to a net loss of SAR 115 million during the first six month of 2018, is mainly due to: - Decrease in gross profit of SAR 200 million as a result of decreasing in revenue. - Increase in depreciation of SAR 75 million as a result of acquiring spectrum and additional property equipment whereby impact from spectrum is SAR 35 million. Worth mentioning, that distribution and marketing expenses decreased by SAR 57 million and general and administrative expense decreased by SAR 33 million as a result of the cost optimization. |
| Reasons of increase (decrease) for quarter compared with previous quarter | Zain managed to decrease significantly its losses from SAR 77M in Q1 2018 to SAR 38M in Q2 2018 as a result of a double digit growth in revenue and focused operational expenses management. The company increased its revenue by 10% amounting SAR 160 million as a result of increasing demand for the companys products and services. This has led to an improvement in gross profit by 3% amounting SAR 36 million compared to Q1 2018. The company improved its EBITDA by 8% amounting SAR 45 million as a result of the improvement of the gross profit and decrease in distribution and marketing expenses by SAR 15 million despite the increase of SAR 7 million in general and administrative expenses. Depreciation increased by SAR 9 million as a result of acquiring additional property equipment. Other charges improved by SAR 15 million mainly from a one off cost incurred in Q1 2018 related to VAT beared by the company on behalf of the customers. |
| Reclassifications in quarterly financial results | Certain comparatives figures have been reclassified to conform with the presentation in the current period. |
| Other notes | - Revenues reached SAR 1,846 million during Q2 2018 compared to SAR 1,865 million during Q2 2017 with a decrease of 1%. Meanwhile, revenues reached SAR 3,532 million during current period compared to SAR 3,784 million same period of last year with a decrease of 7%, - Gross profits reached SAR 1,193 million during Q2 2018 compared to SAR 1,259 million during Q2 2017 with a decrease of 5%, with gross profit margin reaching 65% compared to 67%. Meanwhile, gross profit reached SAR 2,350 million during current period compared to SAR 2,550 million same period of last year with a decrease of 8%, with a stable gross profit margin at 67%. - Distribution and marketing expenses reached SAR 525 million during Q2 2018 compared to SAR 567 million during Q2 2017 with a decrease of 7%. General and administration expenses reached SAR 52 million during Q2 2018 compared to SAR 59 million during Q2 2017 with a decrease of 12%. - EBITDA reached SAR 615 million during Q2 2018 compared to SAR 632 million during Q2 2017 with EBITDA margin reaching 33% compared to 34% in Q2 2017. - Depreciation and amortization expenses reached SAR 436 million during Q2 2018 compared to SAR 397 million during Q2 2017 an increase of 10%. - Operational profit reached SAR 179 million during Q2 2018 compared to SAR 235 million during Q2 2017 with a decrease of 24%. Meanwhile, operational profit reached SAR 323 million during current period compared to SAR 508 million during same period of last year with a decrease of 36%. - Net loss reached SAR 38 million during Q2 2018 compared to net profit SAR 8 million during Q2 2017, and net loss reached SAR 77 million during Q1 2018 with a decrease of 51%. Meanwhile, net loss reached SAR 115 million during current period compared to net profit SAR 53 million during same period of last year. - Total comprehensive loss reached SAR 54 million during Q2 2018 compared to total comprehensive profit SAR 6 million during Q2 2017, and total comprehensive loss reached SAR 75 million during Q1 2018 with a decrease of 27%. Meanwhile, total comprehensive loss reached SAR 129 million during current period compared to total comprehensive profit SAR 46 million during same period of last year. - Loss per share reached SAR 0.197 during current period compared to profit per share of SAR 0.091 during same period for previous year. - Shareholders equity (there is no minority interest) during the current period is SAR 3,565 million compared to SAR 3,605 million same period of last year with a decrease of 1%. - The accumulated deficit reached SAR 2,247 million during current period representing 38% of its Share Capital of SAR 5,837 million compared to SAR 2,221 million same period of last year representing 38% of its Share Capital. - Zain KSA subscriber base stabilized during this quarter compared with Q1 2018 despite the economy changes reaching 8.4 million. - The external auditors have reviewed the financial statement and their conclusion is unmodified. |
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