Sudanese depreciation blamed for Zain’s falling profits

Kuwaiti operator Zain has blamed a fall in H1 profits on the devalued Sudanese currency. The falling value of the Sudanese pound was reportedly responsible for an $80 million drop in the operator’s net profit for the first half of 2013.

Zain reportedly achieved sales of KWD313 million in the second quarter, which was slightly lower than the KWD338 million it managed during the same period of the previous year. Its net income for H1 2013 was $397 million on sales of $2.12 billion.

The group’s chief executive Scott Gegenheimer stated: “Although we are frustrated with the adverse foreign currency exposure predominantly in Sudan, where the local currency fell by 51 per cent against the US dollar over the last 12 months, we have not let this come in the way of our efficiency and innovation drives.”

However, despite the fall in profit, the group’s mobile data revenue rose by 19%, making up 13% of total revenue. In addition, Zain’s commercial LTE services in Bahrain, Kuwait and Saudi Arabia are boosting its customer figures, with 3 million new subscribers in the first half – a 7% year-on-year rise. The group’s subscribers now total 44 million.

Its fortunes in Sudan may also change for the better soon, with the introduction of a new Telecommunications Tax law in June this year. Initially proposed in January, the law provides a 30% corporate income tax break over three years.

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