Kuwait telecom giant’s profit sees sharp fall in Q3
Kuwaiti telecoms giant, Zain, has reported sharp fall in its profits during the third quarter of 2015 blaming the dwindling profits on conflict in the neighboring Iraq and currency fluctuations.
The company released a statement on Sunday, saying that it posted a net profit of 38 million dinars (USD 125.8 million) in the July-to-September period, which showed steep decrease compared to 46 million dinars (USD 152 million) during the corresponding period of the preceding year, AFP reported.
According to the company’s statement, net income during the first nine months of the year also dropped 27 percent to USD 391 million, while it stood at USD 533 million during the corresponding period of the previous year.
Zain officials have attributed the fall in the company’s profits to the appreciation of the US dollar against the Kuwaiti dinar in addition to continued instability in the neighboring Iraq, where the company conducts significant operations.
The company also mentioned continued investments in new technology and a rise in competition from other companies as additional factors precipitating its profit fall.
"The board is working closely with the executive management to prudently deal with the rise in competition and other unavoidable currency and social challenges in several key markets," chairman of the company, Asaad al-Banwan, said on Sunday.
According to reports, consolidated revenues of the company stood at USD 2.8 billion on September 30, down from USD 3.18 billion a year ago.
Despite the decrease in profit, the company's customer base rose to 45.6 million from 43.7 million a year ago.
Zain is Kuwait’s largest mobile phone operator, but in addition to its home country, the company conducts vast operations in Bahrain, Iraq, Jordan, Lebanon, Saudi Arabia and Sudan. It also runs a telecommunication unit in Morocco.
The Kuwaiti government holds a stake of almost 25 percent in the company. Zain is one of three cell phone operators in the Persian Gulf emirate in addition to National Telecommunications Co. (Wataniya) and Kuwait Telecommunications Co. (VIVA).
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