Kuwait's Zain Telecom Q1 Profits Dive 27%

Kuwaiti telecom giant Zain's net profits dived 26.7 percent in the first quarter of 2013, the company said on Wednesday, blaming currency fluctuations in Sudan where it operates and massive investments.

The company posted a net profit of 52 million dinars ($182.4 million) in the first three months of 2013, compared to 71 million ($249.1 million) in the corresponding period of last year, it said in a statement.

Zain blamed the drop on the adverse impact of currency fluctuations in Sudan which it said had cost the company $179 million in revenues and $44 million in net profits.

The company also funded an increase in its stake in a Saudi unit from 25 percent to 37 percent and spent on new technology development, it said.

Revenues dropped 10.2 percent to $1.05 billion on March 31, from $1.17 billion a year ago, Zain said.

Over the past 12 months, the company added 3.9 million new clients and its total subscribers rose to 44.1 million across eight countries.

Besides Kuwait, Zain has operations in Bahrain, Iraq, Jordan, Lebanon, Saudi Arabia and Sudan. It also manages a unit in Morocco.

Zain, in which the government holds a stake of almost 25 percent, is one of three mobile operators in the emirate, along with the National Telecommunications Co (Wataniya) and Kuwait Telecommunications Co (VIVA).