JEDDAH – Zain KSA announced Tuesday that it recorded interim gross profits of SR831 million in the second quarter of 2013, or an increase of 18 percent against the corresponding quarter last year. In addition, the company also successfully narrowed its net losses during the same period to SR370 million, representing a 6 percent decrease in net losses against the corresponding quarter of last year. Fraser Curley, Zain KSA's CEO, said the company generated gross revenues during this year's second quarter amounting to SR1.71 billion, an increase of 9 percent compared to SR1.57 billion during the same quarter of 2012. This resulted from growth in the revenue per subscriber and overall customer base in both pre-and post-paid subscribers, he added. Moreover, gross revenues increased by 13 percent during the six-month period of 2013 reaching to SR3.43 billion from SR3.03 billion during the same period last year. Curley also said the decline in the company's net losses during the six-month period of this year partially resulted from a decrease in the financing costs by 23 percent to SR345 million, compared to SR449 million during the same period of 2012. Furthermore, he said during this second quarter, the company achieved 49 percent gross margin compared to 44 percent during the first quarter of 2013 and 45 percent during the same quarter of last year. This was partially due to the new price regulations on international traffic. Curley pointed out that the 18 percent increase in gross profits achieved during this second quarter also reflects the management's focus on developing and improving its services and products, both in Saudi Arabia and while roaming overseas. Moreover, he said a reduction in cost of revenues during this second quarter was due to reductions in the international interconnection costs. He also said that a 20 percent increase in operating losses during the six-month period of this year that reached SR439 million, compared to SR365 million during the same period of 2012, was mainly due to one-off set-up costs associated with long-term operational cost reduction programs. These were mainly attributed with the two new strategic agreements signed with Ericsson and Huawei for First Level Maintenance and Network Operational Support. The effect of these long-term savings will result in on-going reductions in distribution and marketing costs moving forward. Fahd bin Ibrahim Al-Deghaither, Chairman of the Board of Directors of Zain KSA, said the agreement signed earlier with the Ministry of Finance will contribute to a provision of greater liquidity that will be utilized to reduce a portion of the company's liabilities, and result in further reductions in the financing costs. He added that the company would also benefit from utilizing other liquidity portions to continue expanding and developing its network. He noted that Zain KSA is diligently working on developing it's products and service portfolio, and expressed his confidence in the Company's ability to succeed in continuing the current growth and financial improvements. Al-Deghaither indicated the importance of the current pivotal phase in the company's development – offering much improved customer-experience and improving the network's overall resilience and reliability. “Our on-going success is witnessed by independent awards, such as the best operator in 4G LTE service”, through which "Zain KSA" has covered all the Kingdom's major metropolitan areas. Al-Deghaither reiterated that the management team is continually improving the performance of the company in all operational areas - technical, commercial and financial. He also stressed that he has great confidence in the network efficiency and the quality of its services and innovative commercial offerings that will assist the management in achieving the ambitious operational plans. — SG
