Zain Saudi's telecom tower sales won't impact Q1 earnings: CEO

Mobile Telecommunications Co. Saudi Arabia's (Zain Saudi) decision to sell its telecom towers had no financial impact on Q1 2019 financial results, chief executive officer Sultan Al Deghaither told CNBC Arabia on Wednesday.

"The deal has not yet come into effect and is still subject to final approval of the Saudi telecom regulator," Al Deghaither said.

The sale proceeds will be used to fully reduce the Murabaha facility worth SAR 4.8 billion maturing in four and a half years. The move will cut the company's current debt liabilities.

Zain Saudi's board of directors in November 2018 approved a bid submitted by IHS Holding Ltd. to sell and lease back 8,100 telecom towers for a total of SAR 2.43 billion.

The telecom operator's Q1 2019 strong performance was driven by higher demand for the company's services, reduced operating costs and write-back of provisions for settlement of disputed amounts with the Ministry of Finance and Ministry of Communications and Information Technology.

Zain Saudi maintained positive performance in the last nine months, thanks to its efficient growth strategy.

"The telecom operator incurred accumulated losses on implementation of IFRS. We have no concerns about operations, as the telco holds a solid market share with total subscribers of 8.2 million - an increase of 200,000 users since the end of 2018," he added.

Zain Saudi completed the first trial of 5G technology in seven cities across the Kingdom. It expects to launch commercial services in Q3 2019.

The 5G rollout costs will be unveiled within the next two weeks, Al Deghaither added.

The Kingdom's third largest mobile operator reported a net profit of SAR 129 million for the first quarter of 2019, compared to a net loss of SAR 77 million a year earlier.