Zain continues to grapple with currency devaluation and Saudi underperformance

Zain Group has reported a 27 per cent decline in its first-quarter net profit, blaming steep devaluation in the Sudanese pound and loss-making unit Zain Saudi Arabia for the drop.

The operator recorded net profit of KWD52 million (US$182.6 million) in the three months to March 31, down from KWD70.9 million a year ago.

Sudan accounted for nearly a third of Zain’s customer base and a fifth of group revenue last year, but the country has been mired in economic turmoil following South Sudan’s succession in 2011.

Zain claimed the depreciation of the Sudanese pound against the dollar, by 53 per cent in the 12 months to end-March, reduced revenue by US$179 million, EBITDA by US$76 million, and net profit by US$44 million.

Group revenue was down eight per cent year-on-year to KWD299 million, while the operator added 1.386 million subscribers in Q113, up from just 37,000 in Q112.