Share• Q3 revenue up 10 percent to KD 485 million ($1.6 billion); Q3 net profit up 11 percent to KD 60 million ($196 million)ApplyCtrl + EnterRemove
• Solid performances in Kuwait, Saudi Arabia, Iraq, Jordan and Sudan recorded for the 9M periodApplyCtrl + EnterRemove
• A total of KD 43.3 million ($140 million) in interim dividends distributed to shareholders on Sept 14 for the first six-months of 2023ApplyCtrl + EnterRemove
• Data revenue grew 8 percent to reach $1.8 billion, representing 39 percent of consolidated revenueApplyCtrl + EnterRemove
• Enterprise revenue up 27 percent for 9M as ZainTECH and local B2B teams target key clientsApplyCtrl + EnterRemove
• Robust customer and revenue growth in digital operators, KSA’s ‘Yaqoot’, and Iraq’s ‘oodi’ApplyCtrl + EnterRemove
• Digital services including Dizlee API platform witness revenue growth of 10 percent for 9MApplyCtrl + EnterRemove
• Zain Kuwait teams up with Red Bull Mobile to offer prepaid voice and internet servicesApplyCtrl + EnterRemove
KUWAIT: 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 the nine-month (9M) and third-quarter (Q3) periods ended Sept 30, 2023, serving 52 million customers.
For 9M 2023, Zain generated consolidated revenue of KD 1.4 billion ($4.6 billion), up 11 percent year-on-year (YoY), while consolidated EBITDA for the period reached KD 530 million ($1.7 billion), up 8 percent YoY, reflecting an EBITDA margin of 37 percent. Consolidated net income increased 13 percent YoY, amounting to KD 172 million ($561 million). Earnings per share amounted to 40 fils ($0.13) for the nine-month period.
In Q3 2023, Zain generated consolidated revenue of KD 485 million ($1.6 billion), up 10 percent YoY. EBITDA for the quarter reached KD 183 million ($594 million), an increase of 7 percent YoY, reflecting a 38 percent EBITDA margin. Net income for the three months amounted to KD 60 million ($196 million), a 11 percent increase YoY. Earnings per share for Q3 amounted to 14 fils ($0.05).
The robust consolidated results for the 9M 2023 is mainly attributable to the strong performances of all operations; the gains achieved from the sale and leaseback of towers in key markets; successful group-wide cost optimization initiatives and price revamp programs; the monetization and growth of consumer digital and fintech services; as well as ZainTECH and B2B initiatives building on strategic partnerships and exploiting the investments made in ICT entities,4G, 5G and Fiber-to-the-Home (FTTH) expansion and upgrades.
Key operational notes for 9M 2023
1. The interim cash dividend of 10 fils totaling KD 43.3 million ($140 million) was distributed in September 2023.
2. The 9M period highlighted by net income increases of 38 percent YoY in Zain Kuwait; 234 percent YoY in Zain Saudi Arabia; 561 percent YoY in Zain Iraq; 14 percent YoY in Zain Jordan and 8 percent YoY in Sudan.
3. Data revenue grew 8 percent YoY to reach $1.8 billion representing 39 percent of consolidated revenue.
4. Zain invested $275 million in CAPEX, mainly in FTTH; spectrum fees; 4G and 5G upgrades.
5. Zain entered exclusive negotiations with Ooredoo Group and UAE based TASC Towers Holding to combine approximately 30,000 telecom tower assets in Qatar, Kuwait, Algeria, Tunisia, Iraq, and Jordan into a jointly owned independent tower company in a cash and share deal.
6. The tower infrastructure sale and leaseback deal in KSA, Kuwait and Iraq generated net gains totaling $217 million for the nine-month period.
7. ZainTECH enters agreement to acquire STS, a leading digital transformation solutions provider.
8. Digital services including Dizlee API platform witness revenue growth of 10 percent for 9M.
9. Digital operators ‘Yaqoot’ in KSA, ‘oodi’ in Iraq record revenue growth of 93 percent & 275 percent respectively.
10. Zain KSA in partnership with Red Sea Global, launched the world’s first zero-emission 5G network in The Red Sea powered entirely by renewable energy.
11. Launch of Thought Leadership Report entitled “Building Inclusive Societies Through Connectivity”.
Chairman of the Board of Directors of Zain Group Osamah Al-Furaih said, “Our operations have shown great resilience in overcoming many headwinds as the board continues to work closely with management on all facets of the business, including the development of new business verticals in the digital space and vast network upgrades. In parallel, our focus on implementing comprehensive ESG practices is complementing our mission to enhance sustainable shareholder value.”
“On the back of these robust results combined with our strong balance sheet and financial solvency, and in accordance with our declared 35 fils per share minimum dividend policy for three years starting 2023, on Sept 14, we distributed 10 fils per share as interim dividends for the third consecutive year to shareholders. This amounted to KD 43.3 million ($140 million).”
“We are mindful of the challenges faced by our operation in Sudan with the ongoing social unrest. We are supporting the local management team to safeguard our people and commercial operations to ensure the community stays connected, and hope that the conflict will end soon. Furthermore, through our internal BE WELL mental well-being program, we are supporting our people emotionally impacted by the ongoing regional conflict by providing various resources including professional therapy, creation of a communication platform offering advice and well-being checks from our Mental Health First Aiders team.”
“With distinct merit, we recognize the various government authorities in Kuwait and across our markets for creating a conducive environment that supports the telecom sector and empowers Zain to provide meaningful connectivity and drive systemic change across the communities, businesses, and governments we serve.”
Zain Vice-Chairman and Group CEO Bader Al-Kharafi commented, “Despite the many socio-economic and competitive challenges across our markets, the impressive 9M financial performance reflects the implementation of our value-creative‘4Sight’ strategy in propelling efficiencies, digital transformation and revenue growth. The remarkable operational performance of all our key markets is very gratifying and testament to the coherence between the Group and local management teams in driving synergies and growing the business through multiple initiatives.”
“Zain is witnessing the maturing of its ZainTECH and B2B arm, digital operators in KSA and Iraq, fintech operations and digital services across various markets, which are developing to become compelling businesses in their own right, as monetization from these strategic activities is significantly growing.”
“In Kuwait, we are very optimistic of the potential of marketing partnership with Red Bull Mobile, bringing together Zain’s superior telecom expertise with the adventurous world of Red Bull. Targeting the youth, we are offering appealing options for prepaid voice and internet services. We will foster this partnership and our other digital operators in KSA (Yaqoot) and Iraq (oodi), as we continue to stay ahead of the digital curve, offering the latest innovative technologies and services to customers.”
“Our exclusive negotiations with Ooredoo and TASC Towers Holding into a jointly owned independent tower company are continuing. This is a milestone development that raises the notion of collaboration and regionalization to an entirely new level.”
“The establishment of ‘Zain Omantel International’ (ZOI), is revolutionizing the telecommunications wholesale landscape serving regional operators, international carriers, and global hyperscalers. The team is innovating and creating new growth opportunities, with Zain and Omantel customers benefiting from quality internet connectivity, voice, roaming, and messaging. We are very enthusiastic of ZOI’s strategic growth roadmap in creating value for all stakeholders.”
“ZainTECH’s spectacular debut at GITEX 23 last month was very instrumental in firmly placing the fast-growing entity on the regional ICT enterprise map. The agreement to acquire Jordan headquartered STS, comes 20 years after Zain’s first regional expansion into the Kingdom. The STS talented team, years of expertise and impressive customer base, will amplify ZainTECH and Zain B2B teams’ capabilities to provide clients with cutting-edge and comprehensive digital transformation solutions, solidifying our position as leaders in the industry and driving digital transformation across the region.”
“Zain FinTech, our financial services arm agreement with Al-Ansari Financial Services sets the stage for an exciting partnership that will leverage the strengths of both companies to drive innovation, harness technologies and transform financial services delivery to cater to our evolving customer needs. We aim to expand our fintech service offerings to advance the region’s digital ecosystem and will continue pushing the boundaries, leveraging on the vast network of strategic partners in each of our markets.” Operational review of key markets for the nine months ended 30 September, 2023
Kuwait: Maintaining its market leadership in all areas, Zain Group’s flagship operation saw its customer base grow by 1 percent to serve 2.6 million customers. The Group’s most profitable operation saw its 9M 2023 revenue grew 2 percent to reach KD 264 million ($859 million), EBITDA grew 26 percent to reach KD 124 million ($405 million), representing an EBITDA margin of 47 percent. Net income grew 38 percent to reach KD 84 million ($275 million), mainly due to the successful number range fees litigation of KD 24.68 million ($80.3 million).Data revenue represents 38 percent of total revenue.
Saudi Arabia: For the 9M 2023, Zain KSA revenue grew 10 percent to reach $2.0 billion, EBITDA for the period grew 5 percent and reached $627 million, reflecting an EBITDA margin of 32 percent. Net income for the nine months grew 224 percent to reach $259 million. Data revenue rose by 2 percent to represent 40 percent of total revenue and customers served stood at 8.9 million, a growth of 4 percent. The impressive net income is attributed to the increase in revenue driven by the growth in B2B, Yaqoot, TAMAM, and 5G revenues as well as the gain from the sale of its Tower network to the Kingdom’s PIF.
Iraq: Zain Iraq’s 9M 2023 revenue grew by 19 percent to reach $713 million and EBITDA grew by 11 percent to reach $268 million, reflecting EBITDA margin of 38 percent. Net income increased six-fold to reach $64 million for 9M 2023 driven by increased revenues and sale of its Tower network. The operator’s customer base stood at 18 million customers, maintaining its market leading position.
Sudan: For 9M 2023, Zain Sudan generated revenue of $435 million (up 28 percent), with EBITDA amounting to $215 million (up 20 percent), reflecting an EBITDA margin of 49 percent. Net income reached $189 million, an 8percent increase in USD terms. Data revenue grew 41 percent YoY and represented 35 percent of total revenue, while the operator’s customer base reached 15.6 million, maintaining its market leadership.
Jordan: For 9M 2023, Zain Jordan revenue increased by 3 percent to $394 million, EBITDA reached $162 million, reflecting a healthy EBITDA margin of 41 percent, with net income reaching $58 million, an increase of 14 percent YoY. With the ongoing expansion of 5G services across the country, data revenue represented 50 percent of total revenue. Zain Jordan served 4 million customers (up 4 percent) maintaining its market leading position.
Bahrain: Zain Bahrain generated revenue of $143 million for 9M 2023 (7 percent growth). EBITDA reached $44.3 million, reflecting an EBITDA margin of 31 percent. The company reported a net income of $12 million, for 9M 2023.
