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Zain Kuwait reported a rise in Q2 2019 net profit, triggering a rally in the company’s shares.
The telecom provider’s net profit attributable to shareholders amounted to 50.2 million Kuwaiti dinars ($164.72 million), compared to 45.6 million dinars in Q2 2018, a 10.09 percent increase. Its total operating revenue for the quarter amounted to 406.6 million dinars, compared to 244.3 million dinars in the same period last year, a 66.43 percent increase.
Zain Kuwait’s shares rose 1.56 percent to 587 fils on Thursday at 13:45 GST and have added 30.96 percent since the start of 2019.
“We remain neutral on Zain Group as valuations look stretched, and we believe fundamentals are more than priced in at the current level,” Omar Maher, vice president of equity research at EFG Hermes told Zawya.
According to Zain’s website, the company operates in Kuwait, Bahrain, Iraq, Jordan, Saudi Arabia, Sudan, South Sudan; and in Lebanon as touch (under a management contract).
“We expect limited growth from Kuwait, despite an improvement in competition dynamics as a result of regulatory efforts, as we are not sure about the sustainability of this improvement,” Maher said.
“In other key markets (namely Iraq and Sudan), operating conditions remain challenging and pose an obstacle to recovery. Jordan’s performance remains healthy, but we see limited growth going forward due to market maturity,” he added.
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© ZAWYA 2019
