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UPDATE 1-Zain Saudi's fourth-quarter loss widens, misses forecasts
January 20, 2014 / 2:31 PM / in 4 years

UPDATE 1-Zain Saudi's fourth-quarter loss widens, misses forecasts

* Q4 net loss 462 mln riyals vs net loss of 443 mln riyals yr ago

* Q4 revenue 1.5 bln riyals vs 1.7 bln riyals a yr ago

* 2013 full year loss 1.65 bln riyals vs loss of 1.75 bln riyals in 2012 (Adds details, recasts)

By Matt Smith

DUBAI, Jan 20 (Reuters) - Zain Saudi missed analyst forecasts by posting a widening fourth-quarter loss on Monday and the telecom operator blamed Saudi Arabia’s crackdown on illegal workers and a drop in religious pilgrims visiting the kingdom for falling revenue.

Saudi Arabia’s No.3 mobile company in terms of subscribers, 37-percent owned by Kuwait’s Zain, made a net loss of 462 million riyals ($123.2 million) in the three months to Dec. 31, a bourse filing showed. This compared with a net loss of 443 million riyals in the same period in 2012.

Analysts polled by Reuters on average forecast the company would make a quarterly loss of 375.7 million riyals.

Fourth-quarter revenue was 1.5 billion riyals, down from 1.7 billion riyals a year ago, according to Reuters calculations.

The company said revenue was hit in part by a government crackdown on illegal workers. Since March, more than 1 million foreigners have left the kingdom.

The government also allowed fewer Hajj pilgrims to visit the country this year because of building work at some holy sites, which also hurt Zain Saudi’s revenue. Pilgrims use local mobile telecom services, boosting operators’ revenues.

Zain Saudi’s full-year net loss for 2013 was 1.65 billion riyals, the company said. This compares with a loss of 1.75 billion riyals a year earlier.

The total number of mobile phone subscriptions in Saudi Arabia has fallen from a peak of 56.1 million as of Sept. 30 2011, to 51 million as of Sept. 30 2013, data from the industry regulator shows.

Zain Saudi has yet to make a quarterly profit since launching operations in 2008, but made significant steps in easing its debt burden last year; in July, it extended a $2.3 billion Islamic loan facility at a lower profit rate.

It also agreed a deal with the government in June that would allow it to defer payment of licence-related fees, which could total around $1.49 billion over seven years, and appointed industry veteran Hassan Kabbani as chief executive in September.

$1 = 3.7505 Saudi riyals Reporting by Matt Smith; Editing by David French and Pravin Char

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