Zain announces Q1, 2010 financial results

The Company's consolidated EBITDA reached KWD139.2m ($483.7m), EBIT of KWD99.4m ($345.6m) and net income reaching KWD51.55 ($179.1m).The earnings per share reached 13 fils ($0.05).

Commenting on the results, the Chairman of the Board of Directors of Zain, Mr Asaad Al Banwan said: "These results reflecting the Middle East operations are in line with adopted International Accounting Standards, which necessitates excluding all of Zain Africa's 15 mobile operations, except for net profit, as the company entered into a definitive sale agreement with Bharti Airtel on March 30, 2010."

Mr Al Banwan added, "Despite the economic crisis and the competitive markets in which we operate, we are extremely pleased with the 11% revenue increase which is in line with our expectations."

He further stated, "The organic growth of the EBITDA and Net Income results is all the more impressive when one takes into account that in the same period last year (Q1-2009) we had several reversals of provisions including a favorable ruling resulting in an extraordinary gain of KWD33m ($116m). This is an indication that EBITDA and Net Income growth in Q1, 2010 would have been much higher than stated, as without such provision reversals, the company would have had a respective growth of 14% in EBITDA and 24% in Net Income."

Mr Al Banwan also revealed that the quarter witnessed an increase in total shareholders' equity of approximately 10 percent, reaching $8.72bn, compared with $7.95bn at the end of the first quarter of 2009.

Also commenting on the results, Zain Group CEO Mr Nabeel Bin Salamah said: "With the sale of the Zain Africa assets about to be concluded, the company will reengineer itself while at the same time focusing its resources on further increasing market leadership in the Middle East, offering customers the latest technologies and quality mobile services."

Mr Bin Salamah further added, "These healthy results are a sign of better things yet to come as we diligently strive to maximise shareholders' value in this new era. We will consider all options before us with extreme flexibility."

In recent years, Zain has invested heavily in network expansion in the region especially in vast countries such as Iraq, Jordan, Saudi Arabia and Sudan as well as technology upgrades in Bahrain and Kuwait, all resulting in robust customer acquisition and healthy revenues, a strategy that Bin Salamah was keen to emphasize. "We expect to reap further financial rewards of these strategic and capital intensive investments in the years ahead," he said.