Saudi Zain sees net loss shrink to $93.1 million

Saudi Zain sees net loss shrink to $93.1 million

Indebted telecoms operator Zain Saudi reported a narrowing second-quarter loss on Wednesday, in line with analyst forecasts.

July 19, 2012 1:05 by Reuters

Indebted telecoms operator Zain Saudi reported a narrowing second-quarter loss on Wednesday, in line with analyst forecasts.

Saudi Arabia’s No.3 telecoms operator, an affiliate of Kuwait’s Zain, made a net loss of 349 million riyals ($93.1 million) in the three months to June 30. This compares with a net loss of 448.2 million riyals in the year-earlier period.

Five analysts polled by Reuters on average forecast Zain Saudi would make a quarterly loss of 350 million riyals.

In a bourse statement, the company attributed the narrowing loss to a decrease in financing costs.

Quarterly gross profit was 1.41 billion riyals, down from 1.64 billion riyals a year ago.

Zain Saudi has struggled under mounting losses and multi-billion dollar debts. The operator’s share of the kingdom’s mobile subscribers fell four percentage points to 12 percent in 2011, according to Zain’s annual report, leaving it a distant third to Saudi Telecom Co and Etihad Etisalat (Mobily).

A $1.6 billion rights issue aimed at writing off some of Zain Saudi’s liabilities had sold only 54 percent of shares available, the lead manager said on Monday.

The company’s liabilities totalled 22.9 billion riyals as of March 31, and it is also refinancing a $2.5 billion syndicated loan that matures in July.

($1 = 3.7500 Saudi riyals)

(Reporting By Angus McDowall and Matt Smith; editing by Elaine Hardcastle)