Zain Saudi Q2 loss lowest since operations lauched

Zain Saudi Arabia, the kingdom's newest mobile phone operator, posted its lowest quarterly loss since it started operations two years ago after revenues doubled on higher customers.          

The firm, 25% owned by Kuwait's Zain, made a net loss of 632 million riyals ($168.5 million) in the second quarter, down from 857 million riyals a year earlier, it said in a statement to the Saudi bourse website.                                           
 

The firm said it has reached during the second quarter a breakeven point on core earnings, or EBITDA, ahead of an initial third-quarter deadline.                                           
 

Revenues rose to 1.45 billion riyals during the period, up from 702 million riyals a year earlier and 1.1 billion riyals in the first quarter of 2010.                                           
 

"The reason of the decrease in the second-quarter's net loss is the wider customer base which rose noticeably during the second quarter, exceeding 7 million customers," Saad al-Barrak, Zain Saudi's chief executive said in the statement.                                            
"The gross profit margin rose to 42% against 19% for the same period in the previous year," he said.                                           

Shares in the third mobile phone company to enter the Arab world's largest economy have lost 67% since it started commercial operations in August, 2008.                                           

Zain Saudi paid a hefty $6 billion for its licence and has borrowed heavily to fend off cash-rich rivals -- state-controlled Saudi Telecom Co and Mobily, affiliated to Emirates Telecommunications.