Kuwait Times, Sunday, May 14, 2023 | Shawwal 24, 1444
Zain Group Q1 2023 net profit soars 15% to reach $177 million
Kuwait:
Zain Group, a leading provider of innovative
technologies and digital lifestyle communications operating in seven markets
across the Middle East and Africa, announces its consolidated financial results
for the first quarter (Q1) ended March 31, 2023. Over the past 12 months, Zain
added 2.2 million active customers, a 4 percent increase to serve 53 million
customers.
Zain Group generated consolidated revenue of KD 468 million ($1.53 billion) for
Q1 2023, up 15 percent year-on-year (YoY). EBITDA for the quarter reached KD 165
million ($540 million), up 8 percent YoY, reflecting an EBITDA margin of 35
percent. Net income for the quarter reached KD 54 million ($177 million), up 15
percent YoY reflecting an earnings per share of 13 fils ($0.04).
Key operational notes for Q1 2023
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Zain Group consolidated data revenue grows 10
percent to reach $591 million, representing 39 percent of the Group’s
overall revenue
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During the quarter, Zain Group invested $112 million in CAPEX (tangible and
intangible)
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Kuwait, KSA, and Bahrain witness impressive growth in 5G customers
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Zain KSA completes the sale of 8,069 tower assets to the Kingdom’s PIF for
$807 million, transferring 3,600 out of the 8,069 tower assets. The
ownership of the remaining towers will be transferred in batches in the
coming quarters.
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Zain Iraq finalizes the sale and leaseback as well as the management rights
of 4,968 towers to TASC Towers Iraq (a subsidiary of Zain Group) for $180
million. The second phase to sell these towers to TASC Towers Holding will
be concluded during second half of 2023.
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Fintech services Group-wide witness exponential growth as total revenue
soared five-fold, customer growth of 60 percent to reach 1.1 million
customers with transaction value doubling
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Enterprise revenue up 37 percent as ZainTech and local B2B teams secure
multiple deals offering dynamic new and lucrative ICT services to businesses
and governments.
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Dizlee API platform and VAS digital services Group-wide witness revenue
growth of 48 percent.
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Zain’s digital operator Yaqoot in KSA, and oodi in Iraq, witness robust
growth in revenue and customer growth YoY
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Brand Finance, a leading valuation and strategy consultancy based in London,
values the Zain brand at $2.74 billion, up 14 percent YoY
Newly-appointed Chairman of the Board of Directors of Zain Group Osamah
Al-Furaih said, “It is a distinct honor and privilege to be appointed as
Chairman of Zain Group, a company with a proud history of having a positive
socio-economic impact on communities across all the countries it has operated in
over the years. I want to thank my predecessor, Ahmed Al-Tahous for his
contribution and legacy that took Zain to new heights, and I look forward to
building on these strong foundations and working with fellow Board members and
executive management to continue this upward trajectory of profitable growth and
creation of shareholder value.”
He continued, “A key focus of the Board will be to ensure that our
Environmental, Social and Governance practices continue to be at the forefront
of our sustainability and business strategies. The Board also looks forward to
constructive cooperation with telecom regulators and government authorities
across our footprint given the vital role they play in supporting Zain to
provide meaningful connectivity to the communities, businesses, and governments
we proudly serve.”
The Chairman concluded by commenting on the situation in Sudan, “With sincere
sadness and concern, we are mindful of the challenges faced by our operation in
Sudan and its dedicated workforce that are making personal sacrifices to provide
vital connectivity to the local community. We pray for their safety and are
hopeful that the conflict will end soon.”
Zain Vice-Chairman and Group CEO Bader Al-Kharafi commented, “Our track record
of sustainable growth sees Zain in solid financial position today, ideally
positioned to invest further and exploit the next phase of growth in the telecom
sector and beyond. The truly impressive Q1 2023 results are testament to the
skilful execution of the company’s ‘4Sight’ strategy, focusing on innovative
programs to improve the efficiency and profitability of the operations as well
diversifying income sources from new lucrative business verticals in the digital
and enterprise space.”
“We have made giant strides in positioning Zain as the preferred digital
lifestyle communications provider and transformation partner for our consumer,
enterprises, and government customers across our markets. Our future-ready
approach to proficiently monetize the vast investments in 5G technology, 4G
networks, and fiber expansion across all markets in recent years is paying off,
evident by the 2.2 million additional customers and resulting revenue and net
profit growth during Q1.”
“Our flagship operation in Kuwait continues to perform strongly, especially in
the B2B sector, as well as through its introduction of Zain Max, a quad-play
redefining a new generation of Internet and entertainment plans for postpaid
customers. Similarly, the solid performances of our operations in Saudi Arabia,
Sudan, and Iraq standout for the quarter, as the teams in these markets
effectively navigate their respective competitive and socio-economic
challenges.”
“The current conflict in Sudan is an unfortunate situation for humanity, and we
are doing our utmost to maintain operational stability and provide connectivity
to the community there. Crisis management teams have been established,
implementing strategic initiatives to support our customers and workforce, and
safeguard the network. Voice and data services remain functional in most parts
of Sudan at this point, and we are doing everything in our power to ensure this
remains the case, with Zain teams working 24/7. We are taking all reasonable
measures to protect our people, assets, and commercial operations during this
turbulent time and as soon as normality is restored, the entire network will
become operational without much delay. Zain Sudan is a significant component of
the Zain Group family given its outstanding performance in recent times, and we
look forward to a peaceful solution in the country soon.”
“The exponential revenue and customer growth in several of our digital
initiatives, particularly in regard to our fintech, pure digital operators in
Saudi Arabia and Iraq, and the Dizlee API platform and related VAS activities,
are extremely gratifying, and we will continue to foster their growth. We look
forward to receiving a Digital Bank license in Kuwait soon, and we are actively
preparing the go-to-market roadmap and resources to launch fintech services in
the country thereafter.”
Al-Kharafi concluded by commenting on the increased brand valuation of Zain. “We
are proud to have one of the most powerful brands in the region and all that it
represents with respect to providing meaningful connectivity and empowering and
improving the lives of the communities we serve. This year’s 14 percent increase
in brand valuation to reach $2.74 billion has been driven by the demonstrable
developments within the company, where strong corporate governance,
customer-centric initiatives, heavy investment in network upgrades, B2B
strategies and digital innovation are all impacting stakeholders and customer
experience positively. Our corporate sustainability program and talent
development through our Diversity, Equity and Inclusion initiative, eye-catching
marketing, and social media campaigns have captured the hearts and minds of the
region.”
Financial KPIs of key markets for Q1 ended March 31, 2023
KUWAIT: Maintaining its market leadership, the flagship operation saw
its customer base grow 4 percent to serve 2.6 million. Revenue for Q1 2023
reached KD 87 million ($285 million), a 3 percent YoY growth, EBITDA grew by 2
percent to KD 32 million ($105 million), representing an EBITDA margin of 37
percent. Net income reached KD 19 million ($62 million) for Q1 2023, with data
revenue growing by 1 percent and accounting for 38 percent of total revenue.
SAUDI ARABIA: For Q1 2023, Zain KSA revenue grew by 11 percent to $644
million, EBITDA for the period reached $189 million, reflecting an EBITDA margin
of 29 percent. Net income for the three months increased six-fold reaching $151
million mainly driven by the gain on sale of towers. The operator’s data revenue
represented 40 percent of total revenue and active customers increased 4 percent
to stand at 8.7 million.
IRAQ: Zain Iraq’s Q1 2023 revenue increased by 15 percent to reach $223
million and EBITDA recorded was $76 million, reflecting an EBITDA margin of 34
percent. The operation reported eight-fold increase in net profit of $30 million
for Q1 2023 mainly driven by the gain on sale of towers, noting this Tower sale
represents an intergroup transaction that was eliminated upon Zain Group
consolidation. The customer base increased 4 percent to 18.2 million, reflecting
a market leading position.
SUDAN: For Q1 2023, Zain Sudan witnessed a robust growth in all its
KPIs that saw revenue increase by 70 percent to reach $167 million, with EBITDA
up 66 percent amounting to $86 million, reflecting an EBITDA margin of 51
percent. Net income for the period reached $77 million, up an impressive 68
percent. Data revenue grew by 90 percent representing 34 percent of total
revenue. The customer base increased 2 percent to 16.8 million, maintaining its
market leadership.
JORDAN: For Q1 2023, Zain Jordan revenue grew 4 percent to reach $129
million, EBITDA reached $52 million, reflecting an EBITDA margin of 40 percent,
with net income at $18 million. Data revenue grew 2 percent representing 50
percent of total revenue. The customer base increased by 5 percent to stand at
3.8 million, maintaining a market leading position.
BAHRAIN: Zain Bahrain generated revenue of $48 million, an increase of
6 percent with EBITDA reaching $15 million, reflecting an EBITDA margin of 30
percent. Net income reached $3.8 million, with data revenue growing 5 percent to
represent 45 percent of total revenue.
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