Kuwait’s Mobile Telecommunications Co., better known as Zain, posted a 32% drop in fourth-quarter profit as volatility on currency markets weighed on the company’s results.
The telecommunications firm, which operates in eight markets across the Middle East and North Africa, made a fourth-quarter net profit of 50.5 million Kuwaiti dinars ($179 million), compared with a profit of KWD74.6 million a year earlier, according to calculations based on Zawya Dow Jones data.
Analysts at Cairo-based investment bank EFG Hermes had forecast fourth-quarter profit of KWD66 million, while Bahrain-based SICO had predicted it would total KWD62 million.
The company’s net profit for the full year was KWD252.1 million, compared with KWD284 million the previous year, while revenue for the full year was KWD1.28 billion, compared with KWD1.32 billion in 2011, Zain said in an emailed statement.
“2012 has been a challenging year and Zain’s financial indicators suffered from sharp currency translation impact in some of the markets in which we operate, which cost Zain’s bottom line approximately $109 million,” Asaad Al Banwan, the chairman of Zain Group, said in the statement.
Stripping out the impact of foreign exchange rates, net profit would have been KWD282.6 million for the full year, he added.
The company’s total subscriber base had grown to 42.7 million by the end of last year, up 6% from the previous year.
The firm signed a non-equity agreement with Vodafone in September to work with Zain companies in Saudi Arabia, Bahrain, Kuwait, Jordan and Iraq to provide customers with high quality communications services.
Zain also appointed Scott Gegenheimer in December as group chief executive, six months after he quit as chief executive of rival telecommunications operator Wataniya.
The Kuwaiti company is the biggest operator in the Kuwaiti telecom market, with an estimated 42% market share, followed closely by Wataniya, with about 38%, and finally by Viva, which has a 20% share, according to the latest estimates from Shuaa Capital.
The board has recommended a cash dividend of 50 fils per share, the statement added. Zain shares closed down 1.25% at KWD0.790 Thursday.