Zain Saudi’s Q3 loss widens to $131mn

REUTERS

RIYADH

TELECOMS operator Zain Saudi said its third-quarter net loss widened, citing a move in call traffic from international to national calls, and added it was in advanced talks to refinance a loan worth 9 billion riyals ($2.4 billion).

Saudi Arabia’s No 3 mobile company, an affiliate of Kuwait’s Zain, made a net loss of 493 million riyals ($131 million) in the three months to September 30.

This compares with a net loss of 484 million riyals in the year-earlier period.

In a bourse statement, the company said “the principal reason for the increase in the net loss...has been the rebalancing of significant volumes of traffic from international to national destinations.” Quarterly gross profit was 712 million riyals, down from 870 million riyals a year ago.

The company said its quarterly loss from operations widened by nearly 40 percent to 305 million riyals over last year.

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).

Zain said in its bourse statement that its liabilities exceed its current assets.

In September, Zain Saudi extended the maturity of a 9.75 billion riyals facility by two months to allow for refinancing talks to take place, having already received one extension. It added it repaid 750 million riyals of the facility in August, leaving 9 billion to be addressed.

In Tuesday’s statement, Zain Saudi said it was in “very advanced negotiations” with a syndicate of banks to refinance the loan, with signing “most likely” in the fourth quarter.

Parent firm Zain increased its stake in Zain Saudi to 37 percent from 25 percent after underwriting the affiliate’s capital restructuring.