RIYADH: Mobile Telecommunication Company Saudi Arabia (ZAIN) KSA continues to record net profit for the third consecutive quarter as well as increase in revenue quarter over quarter.
ZAIN KSA reported a net profit of SAR 129 million in Q1 2019 compared to a net loss of SAR 77 million in Q1 2018 mainly due to the increase in revenues by 24% amounting SAR 408 million generated from increasing demand for the companies’ products and services that has reflected in an increase of SAR 363 million in the gross profit; as well from the decrease in CITC royalty fees from 15% to 10% and from the release of certain provision from the settlement signed with MOF, MCIT and CITC.
It is worth mentioning that the decrease in operating and administrative expenses by SAR 21 million is due to the reclassification of leases from operating expenses to depreciation and finance cost for a total amount of SAR 124 million following the adoption of IFRS 16 starting from first of January 2019.
EBITDA has significantly improved to reach SAR 955 million; representing 46% of revenue; compared with SAR 570 million; representing 34% of revenue; for the same quarter of the previous year.
EBIT has improved as well to reach SAR 382 million compared to SAR 143 million for the same quarter of the previous year.
The net impact of the provision released in this quarter is SAR 107 million
Revenue has increased by 2.3% between Q4 2018 and Q1 2019 amounting SAR 47 million mainly from increasing demand for the company’s products and services. Gross profit has decreased by SAR 344 million due to the adjustment mentioned earlier.
Operating and administrative expenses and finance cost decreased in Q1 2019 compared to Q4 2018 mainly from the impact of IFRS 16 where the leases were reclassified to depreciation and finance cost; hence the deprecation and finance cost have increased by SAR 105 million and SAR 24 million respectively in Q1 2019 compared to Q4 2018 The accumulated deficit has increased to reach SAR 1,964 million during current period, representing 33.6% of its Share Capital of SAR 5,837 million compared to SAR 1,800 million for Q4 2018 representing 30.8% of its Share Capital. This increase is due to the impact of adopting of IFRS 16.
Total capex investment for the three-months ended 31 March 2019 is SAR 840 million.[the_ad id=”31605″]