Zain's Saudi unit falls short

Market Wrap: Zain Saudi slid on Wednesday after disappointing earnings results and the replacement of its chief executive.

The Saudi affiliate of the Zain Group trimmed its losses to 484 million riyals in the three months ended September. Salah Malkawi for The National

Zain Saudi Arabia's share price declined yesterday after the telecommunications operator released disappointing earnings for the third quarter and its chief executive resigned.

The Saudi affiliate of Kuwait's Zain Group trimmed its losses to 484 million riyals in the three months ended September 30 but missed analysts' estimates. The company reported a loss of 544m riyals in the same period last year.

Saad Al Barrak resigned yesterday as chief executive of Zain Saudi Arabia and was replaced by Khalid Al Omar after Bahrain Telecommunications Company and Kingdom Holding withdrew a 25 per cent stake in the struggling company.

Despite higher revenue at Zain Saudi Arabia, a fall in profitability would give little encouragement to investors, said Sally Gerges, a telecoms analyst at Beltone Financial.

"We saw significant deterioration in gross profit margins," she said. "They're back to [first-quarter] levels."

On the Kuwait Stock Exchange, Zain declined 1 per cent to 0.930 dinars yesterday.

Kuwait's broader market was down 0.2 per cent to 5,847.50.

The Abu Dhabi Securities Exchange General Index fell 0.2 per cent to 2,486.86, a one-week low. Aldar Properties, the capital's biggest developer, declined 1.8 per cent to Dh1.06. Sorouh Real Estate slumped 3 per cent to 97 fils.

The Dubai Financial Market General Index slipped 0.3 per cent to 1,383.72.

Bahrain's index fell 0.7 per cent to 1,147.50, Oman's was down 0.7 per cent to 5,519.32, and Qatar's rose 0.7 per cent to 8,418.16. The Saudi Tadawul All-Share Index was down 0.2 per cent to 6,105.04.