The Saudi Mobile Telecommunications Company (Zain Saudi Arabia) recorded a net profit of 214 million riyals during the year 2021, compared to a net profit of 260 million riyals in 2020, a decrease of 17.6%.
The company said in a statement to the Saudi market (Tadawul), today, Sunday, that the decline in profits during the comparative years is mainly due to the 22% increase in the cost of revenue, which led to Decreased gross profit with a cumulative effect of 10.3%. This increase in cost came as a result of reversing some provisions during the year 2020, amounting to 484 million riyals.
The company explained that revenues were stable despite the cumulative impact of the Corona 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.
notwithstanding the foregoing; The company was able to reduce the negative impact on net profit by reducing operating expenses by 247 million riyals.
And she stated that among the reasons for the decline in profits was a decrease in financing costs by 409 million riyals. This is due to the decrease in the reference rate for the financing cost in Saudi riyals (SIBOR) and the reference rate for the financing cost in US dollars (LIBOR).
Also through the debt restructuring that took place during the fourth quarter of the year 2020 and the first quarter of 2021 despite the gains of amending the Murabaha financing agreement during the third quarter of the year 2020, amounting to 136 million riyals.
