Zain telecom Q2 profit dives over unrest in Arab region
KUWAIT CITY - Kuwait telecom giant Zain's net profit in the second quarter slumped 34 percent as its businesses were hit by unrest in some Arab countries, the company said on Wednesday.
Zain said it posted a net profit of 39 million dinars ($129 million) in the April-June period from 59.1 million dinars ($196 million) a year ago.
Overall net profit of Kuwait's largest mobile operator in the first six months also dropped by 30 percent to 80 million dinars ($265 million) from 115 million dinars ($381 million) a year earlier, Zain said in a statement.
"Zain Group continues to deal with the diverse market and social challenges that it faces to the best of its ability, especially in conflict areas where circumstances beyond our control have impacted our overall key financial results," chairman Asaad al-Banwan said.
Zain CEO Scott Gegenheimer said conflict and tough competition in Iraq severely impacted its results.
Of the $265 million net profit in the first half of 2015, the Kuwaiti market contributed a healthy $166 million.
Besides Kuwait, Zain has operations in Bahrain, Iraq, Jordan, Lebanon, Saudi Arabia and Sudan. It also manages a unit in Morocco.
Consolidated revenues in the first half dropped 10.3 percent to $1.86 billion from $2.1 billion in the same period of 2014.
Over the past 12 months, the company's total subscribers dropped slightly to 46.3 million from 46.5 million a year ago.
Zain profits have been dropping for three years, with the company blaming currency fluctuations, particularly in Sudan, and new investments for expansion.
Zain, in which the government holds a stake of almost 25 percent, is one of three mobile operators in the emirate, alongside National Telecommunications Co (Wataniya) and Kuwait Telecommunications Co (VIVA).