‎“Zain Saudi Arabia” achieved a net profit of 124 million riyals ‎during Q2, a decrease of 7.5%‎

The net profit after zakat and tax of the Saudi Mobile Telecommunications Company “Zain Saudi Arabia” decreased to 124 million riyals during the second quarter, compared to 134 million riyals in the same quarter of last year, by 7.5%. This came after today’s announcement of the preliminary financial results for the period ending in 30 June 2023 AD (6 months).

The operating profit amounted to 260 million riyals during the second quarter, compared to 262 million riyals in the same quarter of the previous year, a decrease of 0.8%.

As for the total profit, it amounted to 1.48 billion riyals during the second quarter, compared to 1.25 billion riyals in the same quarter of the previous year, an increase of 19%.

The net profit after zakat and tax during the 6-month period amounted to 687 million riyals, compared to 214 million riyals in the same period last year, with a growth of 221%.

Earnings per share in the current period amounted to 0.76 riyals, compared to 0.24 riyals in the same period last year.

“Zain Saudi Arabia” (the company) achieved a net profit of 124 million Saudi riyals during the second quarter of the year 2023, compared to a net profit of 134 million Saudi riyals during the second quarter of the year 2022, a decrease of 7.46%.

The total profit increased by 233 million riyals compared to the second quarter of the year 2022, mainly due to:

– An increase in net revenues by 186 million Saudi riyals, an increase of 8.43% over the revenues of the second quarter of the year 2022, and this increase is due to the growth in the revenues of the business sector, fifth generation services, and digital services, in addition to the growth in the revenues of the company Tamam Finance

Cost of revenue decreased by 4.81%

– An increase in operating expenses by 190 million Saudi riyals, the most important of which is the administrative cost by 25 million Saudi riyals and maintenance costs by 124 million Saudi riyals, resulting from the restructuring of the company’s expenses as a result of the sale and leaseback of communication towers. Expenses also increased Expected credit losses in the amount of 10 million Saudi riyals

– The increase in the financing cost by 36 million Saudi riyals, due to the increase in the reference price for the financing cost in Saudi riyals (SIBOR) and the reference price for the financing cost in US dollars (LIBOR).

Financing income increased by 13 million Saudi riyals on amounts deposited as short-term deposits with banks.

While “Zain Saudi Arabia” achieved a net profit of 124 million Saudi riyals during the second quarter of the year 2023, compared to a net profit of 563 million Saudi riyals during the first quarter of the year 2023, with a decrease of 439 million Saudi riyals, due to the following: ,

Achieving a net profit resulting from the sale and leaseback of 3,600 towers to the Golden Letess Company (GLI) in the amount of 532 million Saudi riyals in the first quarter of 2023, excluding any increase related to the effect of zakat, while there was no transfer of towers in the second quarter of 2023.

– A decrease in revenues by 30 million Saudi riyals, with a decrease in cost of revenues by 102 million Saudi riyals, which led to an increase in gross profit by 69 million Saudi riyals.

A decrease in operating expenses by 22 million riyals

– A decrease in financing costs by 5 million Saudi riyals

The company also achieved an increase in net profit by 221%, as the net profit reached 687 million Saudi riyals during the first half of the year 2023, compared to 214 million riyals during the first half of 2022.

The total profit increased by 411 million riyals compared to the first half of 2022, mainly due to:

– An increase in revenues by 430 million Saudi riyals, an increase of 9.81% over the revenues of the first half of the year 2022, and this increase is due to the growth in the revenues of the business sector, fifth generation services, and digital services, in addition to the growth in the revenues of the company “ All for financing.”

– An increase in the cost of revenues by 19 million Saudi riyals, by 0.95%

– An increase in operating expenses by an amount of 380 million Saudi riyals, the most important of which is the administrative cost by an amount of 23 million Saudi riyals and maintenance costs by an amount of 220 million Saudi riyals, and the expected credit loss expenses increased by an amount of 16 million Saudi riyals.

– The increase in the financing cost by 86 million Saudi riyals, due to the increase in the reference price for the financing cost in Saudi riyals (SIBOR) and the reference price for the financing cost in US dollars (LIBOR).

Finance income increased by 36 million Saudi riyals on the amounts deposited as fixed deposits with banks.

– The net profit resulting from the sale and lease back of 3,600 towers to Golden Letess Company (GLI) amounted to 532 million Saudi riyals, excluding any increase related to the effect of zakat.

The company said that some comparative numbers have been reclassified and adjusted to conform to the presentation of the current period, and there is no impact on the interim condensed consolidated statement of profit and loss.

Additional information:

– The total capital investment during the second quarter of the year 2023 amounted to 62 million Saudi riyals, in order to improve the quality of services provided to customers.

– In June 2023, the company paid the Ministry of Finance an amount of 572 million Saudi riyals and related financing returns.

During the period, the company conducted a comprehensive assessment of compliance with International Financial Reporting Standard No. 16 (IFRS 16) and re-evaluated the right to use assets, the right to use assets classified under held for sale, lease liabilities and lease obligations that are directly related to the held assets out for sale. Accordingly, the company restated the data for the previous period and the auditor’s reservation was removed.