Mobile Telecommunication Company Saudi Arabia (Zain) posted a net profit after zakat and tax of SAR 260 million for the first half of 2019, versus net loss of SAR 115 million, the company said in a bourse statement on Sunday.
|Gross Income||2,279.33||3,004.11||31.8 %|
|Operating Income||391.47||877.83||124.2 %|
|Net Income||(114.90)||259.51||325.9 %|
|EPS (Riyal)||(0.20)||0.44||325.9 %|
The rise in profit can be attributed to a 17.5 percent increase in revenue, to SAR 4.2 billion, on the growing demand for the company’s products.
The revenue growth, coupled with the decrease in CITC royalty fees, resulted in an increase in gross profit by SAR 725 million, the statement added.
This has led to an increase in EBITDA to reach SAR 1.89 billion in H1 2019, representing 46 percent of revenue, amounting to SAR 246 million from operating and administrative expenses to depreciation and amortization and finance charges.
Depreciation and amortization increased by SAR 279 million while financing charges increased by SAR 80 million mainly from the enactment of IFRS 16.
The second-quarter net profit after zakat and tax stood at SAR 130 million, versus a net loss of SAR 38 million in year-earlier period, backed by an 11 percent rise year-on-year (YoY) in revenues; increasing demand for the company’s products; as well as the decrease in CITC royalty fees from 15 percent to 10 percent.
The telecom operator also cited writing back provisions related to its settlement with ministry of finance, Saudi Ministry of Communications and Information Technology (MCIT), and Communications and Information Technology Commission (CITC).
The second quarter also saw a SAR 362 million gross profit increase to reach SAR 1.5 billion compared to SAR 1.16 billion in Q2 2018.
This increase in gross profit was partially offset by an increase in operating and administrative expenses (excluding the reclassification of IFRS 16 amounting SAR 122 million) mainly due to the additional spending in technology and marketing.
EBITDA significantly improved to reach SAR 944 million, representing 46 percent of revenue.
Depreciation and amortization fees increased by SAR 134 million while financing charges increased by SAR 29 million mainly due to the implementation of IFRS 16.
When compared to previous quarter, net profit remained almost flat, on writing back provisions related to its settlement with Ministry of Finance, MCIT, and CITC, resulting in a net impact of SAR 129 million, compared to SAR 107 million in the previous quarter.
Revenue dropped by 1.75 percent due to the seasonality factors, offset by lower cost of revenue.
Operating and administrative expenses increased by SAR 31 million due to the additional spend in technology and marketing. This increase negatively affected EBITDA by SAR 11 million.
|2019 - Q2 (e)||2019 - Q2 (a)||Change|
|P/E Before Unusual Items (TTM)||11.12|
|Market Cap. (M)||7,857.01|
|Return on Average Assets||2.61 %|
|Return on Average Equity||19.01 %|