RIYADH, Saudi Arabia, April 26, 2016 /PRNewswire/ --
Following the excellent performance during 2015, Zain Saudi Arabia (Zain KSA) announced significant improvements in its financial results for the first quarter of 2016 ending March 31, 2016.
Revenues grew by 7% in Q1, 2016 reaching SAR 1,765 million (USD 471 million) compared with SAR 1,657 million USD 442 million) in Q1, 2015, also representing a 6% increase in revenues compared with SAR 1,672 million USD 446 million) for the fourth quarter of 2015.
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The company recorded a significant 28% increase in EBITDA to reach SAR 445 million (USD 119 million) in Q1, 2016, up from SAR 348 million (USD 93 million) during the same quarter of 2015, and a 10% increase from SAR 405 million (USD 108 million) in Q4, 2015. EBITDA margin rose to 25% compared to 21% in Q1 2015, and 24% in Q4 2015.
The company also recorded a 24% increase in gross profit to reach SAR 1,086 million (USD 290 million) for the first quarter of 2016, reflecting a gross margin of 62%, up from SAR 874 million (USD 233 million)and 53% gross margin in Q1, 2015. Gross profit also increased by 2%, up from SAR 1,065 million (USD 284 million) in Q4, 2015.
Zain KSA recorded an impressive 46% reduction in operating losses (EBIT), to reach SAR 32 million (USD 8.5 million for Q1, 2016, down from SAR 59 million (USD 16 million)in Q1, 2015, whilst narrowing operating losses by 61% compared to SAR 82 million (USD 22 million)in Q4, 2015.
Net losses for Q1, 2016 were narrowed by 3% to SAR 250 million (USD 67 million), down from SAR 257 million (USD 68.5 million)during the same quarter last year, while also dropping by 14% from SAR 291 million (USD 78 million)in Q4, 2015.
Commenting on these results, HH Prince Naif bin Sultan bin Mohammed bin Saud Al Kabeer, Chairman of the Board of Directors of Zain KSA said, "Although we operate in a very competitive market, I am pleased to see the company maintaining steady financial improvements. The Company continues to report net losses mainly due to the high amortization charges associated with its license and the cost of financing its debt," His Highness explained.
Prince Naif added "Zain Saudi Arabia continues to play its part in developing the private sector economy within the Kingdom. As the country evolves economically, we are certain that we have an important role to play in the transformation of the Kingdom towards a digitally enabled and diversified economy."
Mr. Hassan Kabbani, Chief Executive Officer of Zain KSA said, "During Q1 2016 we were able to maintain our positive results, both financially and operationally, following a record-breaking year. This indicates the continued success of our transformation plan, driven by our 'Winning through Caring' strategy."
"Saudi Arabia has by far the largest and most competitive telecom market in the region. As we expect the demand for data services to keep rising at the same levels; we continue to provide our customers with great value for money products. The Company's sustained improvements demonstrate that we are attracting more customers and improving the monetization and margins of the services we are selling. The Company's strategy to offer the best mobile video streaming services in Saudi Arabia appears to be resonating well with consumers." Kabbani reveled.
Kabbani added, "We welcome the recent announcement by the CITC to reduce Mobile Termination Rates (MTRs) from the current 15H to 10H and Fixed Termination Rates (FTRs) from 7H to 4.5H, which will come into effect in Q2 this year."
Mr. Kabbani concluded, "This is a great achievement, which all members of our winning team can rightly be proud of. We achieved these positive results thanks to the full support of Zain KSA shareholders, Zain Group, the Board of Directors, as well as the combined efforts of all of the Zain team."
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