October 21, 2012 / 4:06 PM / in 5 years

UPDATE 1-Zain Q3 profit down 15 pct on forex loss

2 Min Read

* Q3 profit 59.7 mln dinars, vs 70 mln dinars

* Q3 revenue 311 mln dinars, vs 329 mln dinars

By Matt Smith

DUBAI, Oct 21 - Kuwaiti telecom operator Zain missed expectations with a 15 percent fall in quarterly profit, hit by a foreign exchange loss.

The former monopoly, which operates in eight countries in the Middle East and Africa, also said on Sunday chief executive Nabeel bin Salama would not renew his contract when it expires in February.

Zain made a third-quarter net profit of 59.7 million Kuwaiti dinars ($213 million), compared with a forecast for 63.7 million in a Reuters poll. Revenue fell 5.4 percent to 311 million dinars.

"During this (nine-month) period Zain Group operations came under significant pressure with respect to extreme currency fluctuations in some of the markets in which we operate," chairman Assad Al Banwan said.

That cost Zain the equivalent of $146 million, he said.

In Kuwait, Zain competes with Wataniya, a unit of Qatar Telecom (Qtel), and Viva, an affiliate of Saudi Telecom Co, while its Iraq and Sudan units accounted for 62 percent of subscribers and 58 percent of revenue, according to its first-quarter results.

Zain's Iraq unit plans to go ahead with a long-delayed stock market listing in Baghdad by early 2013 at the latest, its deputy chief executive said this month.

Under the terms of its licence agreement, Zain Iraq must launch an initial public offering of 25 percent of its shares. Zain's holding in its Iraq unit will fall to 51 percent from 76 percent if the IPO is fully subscribed.

Zain shares ended flat on the day, to be down 18 percent this year. ($1 = 0.2809 Kuwaiti dinars) (Reporting by Matt Smith; Editing by Dan Lalor) (matt.smith1@thomsonreuters.com; +971 506354039; Reuters Messaging: matt.smith1.thomsonreuters.com@reuters.net)

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