Riyadh, (Business Report news)| The profits of Zain Saudi Arabia amounted to 214 million riyals last year, compared to 260 million riyals in profits in 2020.
The company said that the decrease in net profit was mainly due to an increase in cost of revenue by 22%, which led to a decrease in gross profit with a cumulative effect of 10.28%.
This increase in cost came as a result of reversing some provisions during 2020, amounting to 484 million riyals.
Revenues were stable despite the cumulative impact of the Coronavirus pandemic, which led to a decrease in the number of visitors to perform Umrah.
This decline was offset by growth in business sector revenue and 5G services.
The company explained that it was able to reduce the negative impact on net profit by reducing operating expenses by 247 million riyals.
It indicated a decrease in financing costs by an amount of 409 million riyals due to the decrease in the reference price of the financing cost in Saudi riyals (SAIBOR) and the reference price of the financing cost in US dollars (LIBOR).
The company also restructured debt that took place during the fourth quarter of 2020 and the first quarter of 2021 despite the gains of amending the Murabaha financing agreement during the third quarter of 2020, amounting to 136 million riyals.
Zain Saudi Arabia said, for the first time, that it recorded retained earnings of 139 million riyals, and it continues to record a net profit for the fifth year in a row, despite the effects of the Coronavirus pandemic.
The company added that during the previous years, it was able to fulfill its obligations towards settling all the disputed amounts between the company and the Communications and Information Technology Commission in relation to the payment of the annual financial compensation for providing commercial and disputed services for the period from 2009 to 2017. The agreement had positive financial effects on the company.
In early 2022, Zain Saudi Arabia received the final settlement regarding this settlement.
The total capital investment for the year 2021 amounted to 1 billion riyals, in order to expand the fifth generation network and enhance the quality of services provided to customers.
