Kuwait's Zain telecom profits slump 39 pct in 2009

KUWAIT CITY: Kuwait's Zain telecom announced Thursday a 39.4 percent slump in net profits for 2009 due to fallout from the global economic downturn and said it posted a small loss in the year's fourth quarter.

Zain, which has operations in 23 nations in Africa and the Middle East, said it posted 195 million dinars (677 million dollars) in net income in 2009 compared to 322 million dinars (1.11 billion dollars) the previous year.

The top Kuwaiti mobile operator, which on Tuesday signed an agreement to sell its African assets to India's Bharti Airtel for 10.7 billion dollars, posted a 2.4-million-dollar loss in the fourth quarter of last year.

In the fourth quarter of 2008, Zain posted a profit of 300 million dollars.

Earnings per share was 0.051 dinars (about 18 cents) in 2009 compared to 30 cents in the previous year.

"Last year was the most difficult," chairman Asaad al-Banwaan said.

"Companies of the group operated under the pressure of the global financial crisis and most markets were severely impacted by its fallouts, especially the African markets," Banwaan said.

The group provided no details about the performance of its operations, but it has incurred a loss in Saudi Arabia and is believed to have posted a shortfall in Africa.

Still, the board of directors recommended the distribution of around 2.4 billion dollars in cash dividends to shareholders.

Zain said that total consolidated revenues in 2009 reached 8.05 billion dollars compared to 6.94 billion dollars in the previous year, a 15.7-percent rise.

Zain's capitalisation increased to around 20 billion dollars at present from 9.5 billion dollars a year ago. Its customer base rose by 14 percent last year to 72.5 million.

The company on Wednesday said it will post a net profit of 3.3 billion dollars from the sale of its African operations to Bharti Airtel, which will be reflected in the second quarter of this year.

The deal also means that Zain's customer base will shrink to just under 30 million. It will have operations in Kuwait, Saudi Arabia, Bahrain, Jordan, Iraq, Lebanon, Sudan and Morocco.

Zain, in which the state owns a 24.6 percent stake, is one of three mobile operators in Kuwait, along with the National Telecommunications Co. (Wataniya) and Kuwait Telecommunications Co.