New Sales Tax hits Zain's Income

By John Lee.

Zain Group has said that continued social unrest in Iraq, coupled with heightened levels of price competition and implementation of a new 20 percent sales tax on mobile services, as well as wide-ranging tax increases on other sectors in Iraq, have hit spending on mobile services.

The company said that this has contributed to a negative effect on Zain Iraq’s and consequently Zain Group’s overall key financial metrics.

In its Operational Results for the three months to the end of March, the company added:

"The exceptional socio-economic circumstances facing the operation saw Zain Iraq’s financial performance severely affected, with revenues for the quarter reaching USD 270 million, a decrease of 11% Y-o-Y, and EBITDA reaching USD 96 million, down 13%.

"Currency variance loss severely impacted net income which amounted to USD 3 million. The operation’s EBITDA margin stood at 35%, with data related revenues forming 8% of total revenues for the first quarter of 2016."

(Source: Zain Group)

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