Zain faces single digit net profit growth in third quarter

Zain, which is present in 22 countries, reported consolidated financial results for the third quarter of 2008 that showed growth in revenues and net profit with customer numbers reaching 56.3 million. However, the announcement failed to reverse the general slide in the operator’s stock price.

Al Barrak has in his vision to make Zain a 150 million subscriber, US$6 billion EBITDA company by 2011

For the third quarter of 2008, Zain Group recorded consolidated revenues of US$1.887 billion, an increase of 25 per cent compared to Q307. The company’s consolidated EBITDA increased by 20 per cent for the same period to reach US$763.3 million. Zain’s consolidated net profits reached US$326.6 million, an increase of 7 per cent on Q307 profits.

Year-on-year customer growth across the Middle East and Africa was 54 per cent.

“This quarter has been both the most challenging and most rewarding in Zain’s corporate history since the launch of our profitable expansion strategy in 2003,” acknowledged Zain CEO Saad Al-Barrak. “Despite financial turmoil across the globe, we are delighted to have succeeded in raising US$4.5 billion through our capital increase. Additionally the launch of services in Saudi Arabia has been very successful given we have acquired one million customers in less than two months notwithstanding the fierce competition in that market.”

The market did not appear impressed with Zain’s results, with the company’s stock price having been on a steady decline since March, and which suffered a six per cent fall at the end of trading on October 25.