Zain telecom vows to continue Sudan operations despite currency woes
February 21, 2014 (KHARTOUM) – The chairman of the board of directors of the Kuwait-based telecoms Zain, Asa’ad Al-Banwan, has said the company would continue its presence in Sudan saying that selling of its branch in the East African nation at this time would not be feasible.
Al-Banwan said in the annual general meeting that they hope the economic situation would improve and they will earn profits.
“We are hopeful that the continual currency devaluation of the local SDG will abate once the country’s social and economic issues settle,” he said.
Zain’s market share in the Sudanese telecom industry exceeds 50% but its revenues have fallen sharply in 2013 due to sharp drop in the value of the Sudanese pound against the US dollar.
Zain’s profits have declined by 14% in 2013 reaching 216 million Kuwaiti Dinar (KWD) ($764.9 million) compared to 252 million KWD in 2012.
Zain said its 2013 net profit has been negatively impacted by the sharp fluctuation in the exchange rate which caused it to lose $92 million besides losing $57 million due to the currency revaluations on the profits.
The chief executive officer of Zain Kuwait, Scott Gegenheimer, said that Zain Sudan has achieved great success in 2013 at the level of the operating performance and the financial indicators in local currency, pointing those indicators have fallen by 35% due to the decline in the value of the Sudanese pound against the US dollars.
Al-Banwan stressed on Thursday that Zain seeks to reach an agreement with the Kuwaiti government which has significant investments in Sudan to exchange currencies so that Zain could overcome the impact of the fluctuations of exchange rates.
Foreign companies operating in Sudan are suffering from the shortage in hard currency and continue to complain about losing millions of dollars when buying it from the black market.
Telecommunication companies continue to report losing money due to unfavorable exchange rate of the Sudanese pound relative to other major currencies.
Sudan’s economy was hit hard since the southern part of the country declared independence in July 2011, taking with it about 75% of the country’s oil output. As a result Sudan had been unable to come up with hard currency needed by individuals or businesses who want to import or send profits overseas.
The US dollar is trading for 8.15 pounds in the black market. The official exchange rate is around 5.7 pounds to the dollar.
(ST)