Zain Q1 in line with estimates, says Saudi Fransi Cap

Saudi Fransi Capital saying that Zain Saudi’s first quarter results met their estimates, but were below analysts’ consensus by 16 percent.

The mobile operator’s disputes with Mobily (Etihad Etisalat) and the zakat department could have a serious impact on the company's financial position, Saudi Fransi Capital added.

Zain’s strong operating performance reflects higher revenue from the internet sector and lower interconnection fees, the brokerage firm added.

The cash flow expected from the sale of its infrastructure towers could improve its debt situation, it said. 

The brokerage maintained both its ‘hold’ rating on Zain Saudi and the share target price at SAR 10.60.

Saudi Arabia’s third largest telecom service provider reported a net loss of SAR 250 million for the first quarter of 2016, a 2.7 percent year-on-year (YoY) improvement attributed to a rise in revenue and gross profit due to higher demand for the company’s services.