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Mobile Telecommunication Company Saudi Arabia (Zain) announces its Annual financial results for the period ending on 2018-12-31

ZAIN KSA 7030 -8.39% 12.66 -1.16

Element List Current Year Previous Year %Change
Sales/Revenue 7,531 7,306 3.079
Total Profit (Loss) 5,425 4,796 13.115
Profit (Loss) Operational 1,219 903 34.994
Net Profit (Loss) after Zakat and Tax 332 12 2,666.666
Total Comprehensive Income 318 5 6,260
Total Share Holders Equity (after deducting minority equity) 4,012 3,564 12.57
Profit (Loss) per Share 0.569 0.02
All figures are in (Millions) Saudi Arabia, Riyals
Element List Explanation
Reason for increase (decrease) in net profit for current year compared to last year Zain recorded a net profit of SAR 332 million for 2018 full year compared with a net profit of SAR 12 million for last year.

This significant increase in net profit is mainly due to:

- increase in revenue by SAR 225 million as a result of the increasing demand for the company products and services. Without the decrease of the interconnection rates, the revenues would have grown by 5% for the full year.

- decrease in cost of revenue by SAR 404 million mainly from decrease in annual royalty fees; that was addressed in the fourth quarter as previously announced on Tadawul; which has led, along with the increase in revenue, to an increase in gross profit by SAR 629 million.

- increase in other income by SAR 15 million mainly from the finalization of the Universal Service Fund granted from the government t.

- increase in finance income by SAR 10 million generated from short term cash deposit.

This increase in gross profit has been offset by an increase in distribution and marketing expenses by SAR 139 million and depreciation and amortization by SAR 176 million.

Worth mentioning that EBITDA for this year has reached SAR 3,009 million compared to SAR 2,517 million for last year which represents an increase of 20% amounting SAR 492 million representing 40% of the revenue vs 34% for last year. Add to that EBIT has improved by 35% for the amount of SAR 316 million.

Type of the external auditor's opinion Unmodified opinion
Reclassifications in annual financial results Certain comparatives figures have been reclassified to conform with the presentation in the current period.
Additional Information Zain was able to reduce its accumulated deficit to SAR 1,800 million for 2018 representing 30.8% of its Share Capital of SAR 5,837 million compared to SAR 2,263 million for 2017 representing 38.8% of its Share Capital. This reduction is due to the reason mentioned above and the impact from IFRS 15 and 9.

During the fourth quarter of 2018, the Company made a second early voluntary payment for the Murabaha financing agreement amounting SAR 525 million. The total voluntary payment; since the refinancing of the Murabaha financing agreement in June 2018; bringing the total voluntary payment up to SAR 1,125 million to contain the increasing cost of debt and reduce the debt of the company; portraying the company’s solid cashflow generation ability.

Zain maintained a total subscribers base of 8 million as well as a stable Data revenue of 51% (excluding value added services and SMS) comparing with 2017.

Total capex investment for the full year 2018 was SAR 1,924 million.

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