The profits of the Saudi Mobile Telecommunications Company Zain Saudi Arabia decreased by 46.39%, to reach 260 million riyals in 2020, compared to 485 million riyals in 2019.

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According to Arabiya Net, the company said in a statement that this happened after the company's revenues fell by 5.6% to 7.917 billion riyals, compared to about 8.4 billion riyals in 2019, as a result. The cumulative effect of the Corona pandemic, which led to a decrease in the number of visitors for Umrah in addition to the limitation of Hajj to domestic pilgrims, in addition to reducing prices for terminating calls during the second half of the year 2020.

The company said it continued to record net profits for the fourth consecutive year despite the effects of the emerging corona virus (Covid-19).

besides the decline in revenues, the reason for the decrease in net profit is mainly due to an increase in the cost of revenue by 2.2%, which led to a decrease in the gross profit with a cumulative effect of 8.8% .

the company said that the company was able to reduce the negative impact on net profit by reducing operating expenses by 136 million riyals.

She explained that the decline in profits also resulted from an increase in depreciation and amortization of 128 million Saudi riyals as a result of capital expenditures investments, while financing costs decreased by 146 million riyals. This is due to the decrease in the reference price for the cost of financing in Saudi riyals (SIBOR) and the reference price for the cost of financing in US dollars (LIBOR) as well as from the results of the rights issue.

The murabaha refinancing agreement resulted in adjustment gains under IFRS 9 accounting treatment of SAR 136 million.

Zain Saudi Arabia was able to reduce its accumulated losses to reach 54 million riyals for the year 2020, which represents 0.60% of its capital of 8,987 million Saudi riyals against 1,608 million Saudi riyals for the year 2019 Which represented 27.5% of its capital of 5,837 million riyals.

This decrease is due to the reduction of the company's capital by 1,350 million Saudi riyals to offset the accumulated losses and the net profit recorded for the year.

During the last quarter, the company increased its capital through a rights issue of 4,500 million Saudi riyals.

The company also reversed some provisions during the fourth quarter of the current year with a net effect of 149 million Saudi riyals.

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