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ShareKUWAIT: Zain Group, a leading provider of innovative technologies and digital lifestyle communications operating in eight markets across the Middle East and Africa, announced its consolidated financial results for Q2 and six months ended June 30, 2024. Zain served 47.8 million customers at the end Q2 2024, an exceptional 13 percent increase from Q1 2024 as five million customers return to the network, due to the network stabilization efforts being carried out in Sudan.
In Q2 2024, Zain Group generated consolidated revenue of KD 479 million ($1.6 billion), up 4 percent compared to Q2 2023. Normalized EBITDA grew 13 percent YoY to reach KD 178 million ($579 million), reflecting an EBITDA margin of 37 percent. Normalized net income growth soared 55 percent to reach KD 52 million ($170 million) reflecting an earnings per share of 12 fils. Normalized EBITDA and net income growth for Q2 2024 is arrived at by adjusting the number range claim in Q2 2023.
For H1 2024, Zain Group generated consolidated revenue of KD 945 million ($3.1 billion). Normalized EBITDA grew 1 percent YoY to reach KD 325 million ($1.1 billion), reflecting an EBITDA margin of 34 percent. Normalized net income growth for the first six months was 11 percent reaching KD 81 million ($265 million), reflecting earnings per share of 19 fils ($0.06). Normalized EBITDA and net income growth for H1 2024 is arrived at by adjusting the number range claim and tower transaction gain in H1 2023.
Key operational notes for Q2 and H1 2024
1. The Board declares an interim dividend of 10 fils per share for the 4th consecutive year, that will be payable to entitled shareholders on Oct 6, 2024.
2. Zain KSA announces cash dividend of SAR 449 million ($120 million). Zain Group received $44 million.
3. In comparative terms, Q2 2024 net profit growth is impacted by Kuwait number range claim in Q2 2023
4. Q2 2024 includes $20 million impairment of network assets in Sudan
5. Overall Q2 revenue grew 4 percent YoY despite the network and distribution operational challenges in Sudan, whereby network services and coverage are gradually improving
6. Sudan recovery plan and new data center sees over 5 million customers returning to the network resulting in 13 percent increase in total Group customers compared to Q1 2024
7. Currency devaluation in Sudan negatively impacted H1 2024 key financial KPIs (currency devalued from SDG 596 per $1 in June 2023 to SDG 1,799 per $1 by end of June 2024)
8. H1 2024 data revenue grew 1 percent YoY to reach $1.2 billion, representing 39 percent of Group revenue
9. Over the six months, Zain Group invested $159 million in CAPEX (tangible and intangible)
10. Operations in Kuwait, KSA, Bahrain and Jordan witness impressive H1 2024 growth in 5G revenues
11. Fintech services witness exponential growth for H1 2024 as total revenue increased 24 percent YoY, with transaction value increasing 56 percent
12. Enterprise revenue for H1 2024 up 9 percent as ZainTECH and local B2B teams secure multiple deals including the integration of the STS acquisition during H1 2024
13. Digital operators Yaqoot in KSA, and Oodi in Iraq, report customer growth of 8 percent and 37 percent respectively
14. Digital services including Dizlee API platform add gaming and streaming services to drive growth and expand the customer base
15. Zain wins Best Corporate Governance Award 2024 by World Finance; Leadership in SDGs Award 2023; and Championship Award in Women Empowerment 2024 at the 9th Annual Global Good Governance Awards organized by Cambridge IFA
16. Zain publishes its 13th annual sustainability report, entitled “A Pathway to Value Creation”
Commenting on Q2 and H1 2024 results, Chairman of the Board of Directors of Zain Group Osamah Al-Furaih said, “The Board is pleased with the sound financial and operational performance of the company given the exceptional socio-economic and currency challenges that management is having to contend with, particularly in Sudan. We remain resolute in our focus to implement effective environmental, social, and governance (ESG) practices, further seeking and developing multiple new lucrative business verticals, and preparing the company for the next phase of sustainable growth in driving shareholder value.”
“Given the performance in H1 2024, combined with our strong balance sheet and financial solvency, the Board is pleased to declare a fourth consecutive half-year dividend of 10 fils per share, in accordance with our annual minimum dividend policy of 35 fils per share.
Zain Vice-Chairman and Group CEO Bader Al-Kharafi commented, “The resilient Q2 2024 performance that saw a solid 79 percent net profit increase compared to Q1 2024, is a result of our focus on accelerating revenue and customer growth, and implementation of numerous cost optimization and mitigating initiatives across all our operations. This has set the scene for a solid year. It’s unfortunate that the unavoidable currency devaluation in Sudan continues to impact an otherwise impressive operational quarter.”
“We are seeing areas of positivity in Sudan where the persistent turnaround efforts of the team there saw five million customers recently return to the network, a remarkable achievement given the exceptional circumstances. Our mitigation efforts that focus on network service availability and customer initiatives are paying off”, Al-Kharafi said.
“We are laser focused on fostering the growth of our integrated digital solutions arm ZainTECH in cooperation with our operational B2B teams, geared towards making Zain the digital transformation partner of choice for governments and businesses regionally. The recent opening of ZainTECH offices in KSA and the integration of STS into our enterprise ecosystem adds enormous capabilities to offer transformative solutions and delivers great value for clients.”
“Our fintech entities in KSA, Iraq, Jordan, and most recently in Bahrain, as well as our pure digital operators in KSA and Iraq are witnessing healthy revenue and customer growth. We will continue to expand these lucrative areas of the business across our footprint and look forward to launching fintech services in Kuwait later this year”, he added.
Al-Kharafi concluded, “As a leading entity listed on the Premier Market in Kuwait, Zain believes sound corporate governance plays a significant role in providing long-term sustainable value to all stakeholders. It was a gratifying achievement to be recognized as possessing the ‘Best Corporate Governance’ practice in Kuwait for four consecutive years by World Finance Publishing House. This milestone justly rewards our Investor Relations, Corporate Governance, and Sustainability teams’ high ethical standards, transparency, and professionalism towards all our stakeholders.”
Financial KPIs of key markets for 3-month & 6-month period ending June 30, 2024
KUWAIT: Zain Group’s flagship operation maintained its market leadership, with its customer base increasing 1 percent to reach 2.7 million. For the Group’s most profitable operation, revenue for the quarter grew 9 percent to reach KD 93 million ($303 million), Normalized EBITDA grew 11 percent to reach KD 37million ($122million), reflecting an EBITDA margin of 40 percent. Normalized net income grew 17 percent YoY to reach KD 24 million ($78 million). Despite the intense competition, the operator continues to expand and grow its leading nationwide 5G network capturing the largest 5G customer base and revenue market share in the country. Normalized EBITDA and net income ‘growth’ for Q2 2024 is arrived at by adjusting the number range claim in Q2 2023 (KD 24.68 million).
SAUDI ARABIA: Revenue for the quarter grew by 7 percent YoY to reach $680 million, while EBITDA reached $208 million, reflecting an EBITDA margin of 31 percent. Net income for the quarter reached $28 million. The operator’s 5G network covering over 66 cities saw data revenue represent 40 percent of total revenue and customers served stood at 9 million.
IRAQ: Revenue for the quarter jumped 13 percent YoY to reach $263 million, EBITDA grew by 28 percent reaching $115 million, reflecting an EBITDA margin of 44 percent, with net profit soaring 196 percent to reach $39 million. H1 2024 data revenue grew 29 percent representing 38 percent of total revenue. Operator’s customer base reached 19 million customers maintaining its market leading position.
SUDAN: Revenue for the Q2 2024 when compared to Q1 2024 increased 41 percent to reach $71 million, with strong EBITDA growth of 195 percent when compared to Q1 2024 reaching $34 million, reflecting an EBITDA margin of 49 percent. Net income for the quarter grew 51 percent when compared to Q1 2024, reaching $33 million. Customer base increased 92 percent to reach 10 million, up from 5.2 million last quarter due to the robust recovery plan and new data center in Port Sudan.
Due to the rapidly developing situation in Sudan, Q2 2024 performance has been compared with Q1 2024, as any comparison with Q2 2023 would distort the results due to the rapidly evolving conditions in Sudan coupled with the effects of significant currency devaluation in Sudan.
JORDAN: Q2 2024 revenue grew 4 percent to reach $137 million, EBITDA grew by 3 percent and reached $56 million, reflecting an EBITDA margin of 41 percent, while net income for the period reached $17 million. With the ongoing expansion of 5G, FTTH and 4G services across the country, H1 2024 data revenue grew 7 percent representing 51 percent of total revenue. Zain Jordan served 4 million customers, up 5 percent maintaining its market leadership.
BAHRAIN: Revenue for the quarter was stable at $50 million. While EBITDA grew 12 percent QoQ to reach $16 million, reflecting an EBITDA margin of 32 percent. Net income increased 3 percent to reach $3.6 million, with H1 2024 data revenue growing by 6 percent to represent 46 percent of total revenue.
