Zain 2009 net profit growth target drops to 20% from 30%

www.WirelessFederation.com/news: Zain, the African and Middle Eastern mobile operator, has lowered its net profit growth targets for 2009 from 30% to 20% and is seeking a credit rating to tap longer term debt markets by 2010-end. Ibrahim Adel, the Chief Communications Officer for Zain said “realistically we can do something in the 20% region this year” for net profit growth”.
Zain has announced lowered targets due to global recession and the economic conditions. The company will also seek a credit rating by the end of 2009 to allow Zain to tap longer term debt markets. Adel said Zain will refinance the USD 4 billion through sukuks and bonds.
The operator is in talks with Saudi banks to refinance a USD 2.5 billion murabaha facility due in July and has already received “commitments from two leading financial institutions in Saudi”.Adel says the focus for this year has shifted and will no longer be on mergers and acquisitions, but the valuations havenot dropped to a level Zain wants.
Zain also plans a cut in its expenditure targets by half, Adel said, as it focussed on synergies among its various units. Adel said the group’s capital expenditure will decrease to USD 1-1.5 billion for this year, which will allow the firm to meet all targets.