Zain Saudi Arabia Q2 revenue increases by 107% to SAR 1.5 billion
- Remarkable 7 million customers and EBITDA break-even achieved within 22 mths of operation
- Gross profit grows to SAR 608 million, a 357% increase on second quarter of 2009
- Focus on growth areas of data, video and broadband services pays off
(Picture left of His Royal Highness Prince Dr. Husam bin Saud bin Abdul Aziz, Chairrman of Zain KSA)
Riyadh, Kingdom of Saudi Arabia, 17 July 2010
1 SAR = 0.267 USD
Zain Saudi Arabia (Zain KSA) announced significantly increased revenues for the 3 months ending June 30, 2010, a milestone in its investment in the Saudi market. The company has now reached a remarkable break-even point for profit before interest on its Murabaha loan, taxes and depreciation (EBITDA) for the second quarter of 2010, within a period of only 22 months since commencing operations in August 2008.
The results exceeded expectations, with revenue up 107% to more than SAR 1,450 million, compared to SAR 702 million in Q2 2009, and a significant growth in gross profit which increased by more than 357% to SAR 608 million compared to SAR 133 million for the same period in 2009. Operational losses decreased by 55% to SAR 314million compared to SAR 706 million for the same period last year.
Zain KSA has succeeded in strengthening its market share by taking its total customer base to over 7 million in less than two years. This market share gain reflects Zain's quality and brand equity for local customers as well as the success of its investment in the important growth area of data, video and broadband services.
His Royal Highness Prince Dr. Husam bin Saud bin Abdul Aziz, Chairman of Zain KSA, confirmed that the financial results for 2010 second quarter demonstrated Zain’s ability to position itself in the highly competitive Saudi market. He also mentioned that the positive results reflect the creativity of Zain in its operational and marketing activities.
Dr. Saad Al Barrak, Zain KSA's CEO and Managing Director, said the period was one in which zain had been able to reduce the cost of local calls and significantly increase activities within its local network leading to a reduction in the net loss by more than 26%, at SAR 632 million compared to SAR 857 million in 2009, in addition to significant growth in gross profit of 42% compared to the first quarter of 2010. He also noted that these factors combined to contribute to achieving breakeven point at the EBITDA level during the second quarter of 2010, ahead of initial expectations.
Dr. Al Barrak also mentioned that Zain KSA decreased its operational costs and increased its revenues significantly by expanding its infrastructure and increasing its efficiency, as well as offering unique and creative Broadband services and creating attractive service packages. He also mentioned that Zain will be looking to expand its network to cover 93% of the populated areas of KSA by the end of 2010 which is part of “Phase B’’ of its expansion plans.
He added that Zain had expanded its international offering during this period by signing more than 735 agreements with various mobile service providers around the world, including voice, video and data roaming alongside broadband services.
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