Zain KSA records operational breakeven in second quarter

(MENAFN- Arab News) RIYADH: Zain KSA has for the first time in its history achieved operational breakeven during a quarter. Financial results for the second quarter of 2015 (Q2 2015) have recorded positive operating profit (EBIT) compared with an operating loss of SR136 million during the corresponding quarter of 2014. Operating losses decreased during the first half by 78 percent to SR58 million compared to SR263 million during the first half of 2014.
The company also reported a 64 percent growth in EBITDA during Q2 2015 at SR435 million up from SR264 million in Q2 2014 along with a 39 percent increase for the six months period at SR782 million. up from SR564 million for the same period last year. EBITDA margin rose to 26 percent in Q2 2015 up from 17 percent during the corresponding quarter last year and to 23 percent in H1 2015 up from 18 percent for the first half of 2014.
Gross profit rose 19 percent to SR949 million for the second quarter of 2015 up from SR797 million in Q2 2014 with a gross margin of 52 percent and by 14 percent during the six months period to reach SR1.82 billion up from SR1.59 billion during the same period of 2014.
Net losses for the quarter were reduced by 39 percent to SR201 million down from SR329 million during the same quarter of 2014. For the half year period net losses were reduced by 29 percent to SR458 million compared to SR647 million during H1 2014.
Commenting on the results Farhan bin Naif Alfaisal Aljarbaa chairman of the board of directors of Zain KSA said: 'I am delighted to see the continued excellent performance of the company as witnessed in these financial results. This is a historic quarter for the company being the first quarter where we are able to report a positive EBIT. I would like to congratulate the management team on this outstanding performance.'
Hassan Kabbani CEO of Zain KSA commented: 'Achieving EBIT breakeven is a very important milestone in the turnaround of Zain KSA. The operational improvements we have made as part of our strategy are now delivering consistent results.'
He said: 'During the quarter we introduced Khatheer our new flat rate of 19 halalas to call any network without conditions. This new tariff was enabled by a 40 percent reduction in the Mobile Termination Rate (MTR) from 25 halalas to 15 halalas. I am proud to report that we were the first service provider in the Kingdom to pass on fully the reduction to consumers. On this basis I believe I can claim that Zain KSA really is the consumer's champion.'
Kabbani added: 'Customers are finding that Zain's data and voice services are better value for money with a customer experience exceeding their expectations. In general our customers report that the overall customer experience they enjoy with Zain KSA is better. We believe that our sustained financial improvements demonstrate that our strategy is working.'
Kabbani said: 'I would like to thank the Zain KSA shareholders board of directors and Zain Group for their continued trust and support. Thanks to the Zain KSA team for their efforts to improve our performance and customer experience each and every day. Of course none of this would be possible without the trust of our 11 million customers. '