Telecom operator Zain Saudi made another loss in the third quarter, missing forecasts and pushing the company closer to a capital restructuring to keep it within limits required by the bourse. The results push accumulated losses at Zain Saudi, which is 25-percent owned by Kuwait's Zain, to about 9.2 billion riyals ($2.5 billion), or 66 percent of its paid-up capital. Bourse rules say listed firms must cut their capital if losses exceed 75 percent, cancelling some of the accumulated losses. Zain Saudi has been in the news in recent weeks when a $950 million deal to sell Zain's quarter stake in the Saudi firm fell apart in September, and on Tuesday its chief executive, Saad Al-Barrak, resigned. “Zain Saudi needs to complete the restructuring sooner rather than later, and Barrak's departure may pave the way for this,” said Asim Bukhtiar, Riyad Capital head of research. “Once this happens, investors can focus on Zain Saudi's results. We expect the company to turn profitable in 2013. If it can achieve this sooner, then the share price should respond.” Zain Saudi shares were down 0.84 percent at 1018 GMT, taking their losses to 24 percent in 2011. The telecom operator reported a net loss of 484 million riyals in the quarter ended Sept. 30, compared with 544 million riyals a year earlier. Analysts had forecast, on average, a loss of 346 million riyals, according to a Reuters poll. Third-quarter gross profit was 870 million riyals, up from 712 million riyals a year ago. “The decrease in net loss is due to the sizable expansion in (the) company's customer base, noticeable rise in calls volume, and the increased demand of broadband services within the company's own network,” Zain Saudi said in a statement. In February, the firm's board recommended cutting its capital by 55 percent and proposed subsequently issuing 4.4 billion riyals of new shares. The proposals have been in abeyance while the bid for Zain's stake was in play.
