KUWAIT CITY (AFP) – Kuwait telecom giant Zain's net profits dived 14 percent in the second quarter of 2013, the company said on Monday, blaming currency fluctuations from its unit in Sudan.
The company posted a net profit of 61 million ($214 million) in the April to June period of 2013, compared to 70.9 million dinars ($248.8 million) in the corresponding period of last year, a statement said.
In the first six months of 2013, Zain net profit dived 20.3 percent to 113 million dinars ($396.5 million) compared with 141.9 million dinars ($497.9 million) in the first half of 2012.
Zain blamed the drop on the adverse impact of currency fluctuations predominantly in Sudan saying it had cost the firm $347 million in revenues and $80 million in net profit for the six month period.
With regards to its loss-making Saudi unit, Zain said it signed an agreement last month with the Riyadh government to postpone payments of its entitlements over the next seven years.
These deferred payments are estimated at $213 million annually, a total of $1.5 billion for the entire period, Zain said. It has been agreed that the postponed instalments will be converted into a commercial loan, the first instalment is due on 1 June 2021.
Earlier in the year, Zain said it funded an increase in its stake in the Saudi unit from 25 percent to 37 percent.
Over the past 12 months, the company added 3.0 million new clients and its total subscribers rose to 44.4 million on June 30, 2013 across eight countries.
Besides Kuwait, Zain has operations in Bahrain, Iraq, Jordan, Lebanon, Saudi Arabia and Sudan. It also manages a unit in Morocco.
Zain, in which the government holds a stake of almost 25 percent, is one of three mobile operators in the emirate, along with the National Telecommunications Co (Wataniya) and Kuwait Telecommunications Co (VIVA).