Zain KSA Achieves Profit of SR214 mln at End of 2021

The net profit after zakat and tax fell for the Mobile Telecommunication Company Saudi Arabia “Zain KSA” to SR214 million during the year 2021, compared to SR260 million during the year before last, at a rate of 18%. (12 months).

The operational profit during the current period amounted to SR699 million, compared to SR1.002 million during the same period last year, a decrease of 30%.

The gross profit during the current period, it amounted to SR4.88 billion, compared to SR5.44 billion during the same period last year, a decrease of 10%.

Profits per share during the current period amounted to SR0.238, compared to SR0.379 during the same period last year.

Zain KSA continues to record net profit for 5 years in a row despite the outbreak of Covid-19.

Zain KSA recorded a net profit of SR214 million for the year ended 2021 as compared to a net profit of SR260 million in 2020, resulting a net decrease in the net profit by 17.56%.

The reason for the decrease in the net profit is mainly due to:

– The revenue was almost stable despite the cumulative impact of the pandemic which led to a minimal number of visitors for Umrah; whereby it was compensated by the growth in B2B and 5G revenues.

– The cost of revenue has increased by 22%, which results in decrease of the gross profit by a cumulative impact of 10.28%. This increase in cost is the result of the release of certain provisions in 2020 amounting SR484 million.

– Despite the above; the company managed to partially absorb the negative impact on the net profit by decreasing Opex by SR247 million.

-Finance cost decreased by SR409 million due to the decrease in Sibor and Libor as well as from the restructure of debts in Q4 2020 and Q1 2021 despite the gain of MFA modification booked in Q3 2020 amounting SR136 million.

The company said in a statement that for the first time, Zain KSA recorded retained profits of SR139 million.

During the prior years, Zain fulfilled all its obligations towards the Settlement of the disputed amounts between the company and CITC regarding the payment of disputed annual royalty fee for the period from 2009 to 2017; whereby the agreement had positive financial implications on the company. In early 2022, Zain received the final clearance regarding this settlement.

Total capex investment for the full year 2021 was SR1 billion, to further expand the 5G network, enhance the quality of services provided to customers.