Mobile Telecommunication Company Saudi Arabia (Zain Saudi) reported a net profit of SAR 399 million in Q4 2018, higher than Al Rajhi Capital's estimates of SAR 263 million, the brokerage firm said in an earnings review on Monday.
"The bottom-line beat can largely be attributable to higher-than-expected reversal of cost following the amendment in calculation of commercial service fee," it added.
The fourth-quarter revenues reached SAR 2.04 billion, beating Al Rajhi's estimates of SAR 1.99 billion.
According to the brokerage, the planned tower sale will allow the telco to reduce capital expenditure and leverage.
"The reversal of commercial service fees of SAR 1.7 billion, coupled with annual savings of SAR 300 million would boost reported EBITDA in the coming years. However, this would be partially offset by reduction in EBITDA on account of tower sale to IHS Holding Ltd. though the sale is NPV positive," it added.
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