Zain Saudi Narrows Losses As Revenues Improve

Indebted telecom operator Zain Saudi said it narrowed losses in the first quarter as revenue rose and financing costs fell.

Saudi Arabia’s number three mobile company, an affiliate of Kuwait’s Zain, made a net loss of 398 million riyals ($106.13 million) in the three months to March 31 versus a loss of 420 million in the year-ago period.

Analysts polled by Reuters on average forecast Zain Saudi would make a quarterly loss of 387.6 million riyals.

The company, which has yet to make a quarterly profit since launching operations in 2008, often struggles to compete with better-resourced rivals Saudi Telecom Co (STC) and Etihad Etisalat (Mobily).

Zain Saudi attributed the narrowing first-quarter loss to rising income and lower financing charges, according to a bourse statement.

Quarterly revenue was 1.78 billion riyals, up from 1.52 billion a year ago.

First-quarter financial charges fell to 171 million riyals from 229 million a year earlier.

Zain Saudi has repeatedly extended the maturity of a 9 billion riyals Islamic facility, which is now due on April 30. A separate $600 million loan is due a day later.

The terms of a new five-year facility to replace the Islamic loan are being finalised, Zain Saudi said in the statement, with the smaller loan also set to be refinanced.

Parent firm Zain in July increased its stake in Zain Saudi to 37 per cent from 25 per cent after underwriting the affiliate’s capital restructuring.