Zain Group’s net income sees a 3% boost in Q1

Result said to be affected by currency devaluation in Sudan and intense competition
Q1 2017, Q1 results, TELECOM REVENUES, Zain, Zain Group, Zain Group’s net income sees a 3% boost in Q1
Bader Al-Kharafi: Focused on further innovation in digital services and collaboration with leading technology players across the globe
Bader Al-Kharafi: Focused on further innovation in digital services and collaboration with leading technology players across the globe
Mohannad Al-Kharafi: Board to ensure all strategic partnerships and investments are geared towards maximising shareholder value and driving the business forward
Mohannad Al-Kharafi: Board to ensure all strategic partnerships and investments are geared towards maximising shareholder value and driving the business forward

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Zain group’s net income for Q1, 2017 reached KD 38 million ($125 million), up 3% YoY reflecting earnings per share of 10 Fils ($0.03). Zain served 46.1 million customers at the end of the period, reflecting a 1.4% increase.

Consolidated revenues reached KD 247 million ($810 million) for the first quarter, down 11% YoY. EBITDA reached KD 107 million ($352 million), down 13% YoY, reflecting an EBITDA margin of 43.4%.

For Q1, 2017, foreign currency translation impact, predominantly due to the 59% currency devaluation in Sudan from 6.4 in Q1, 2016 to 15.6 (SDG / USD), is said to have cost the company $148 million in revenue, $68 million in EBITDA and $32 million in net income. Excluding the above-mentioned currency translation impact, YoY revenues would have grown by 4%, EBITDA by 3% and net income by 27%.

Group data revenues (excluding SMS and VAS) increased 4% YoY, representing 25% of the group’s consolidated revenues.

"It is an honour to have been appointed Chairman of Zain Group, a pioneering company that has placed Kuwait on the world telecom map and created enormous returns for its shareholders over the years," said Mohannad Al-Kharafi, chairman of the board of directors of Zain Group.

Vice-chairman and group CEO, Bader Al-Kharafi said: “We are pleased with the turnaround and improved performance of Zain Saudi Arabia, which recorded its first ever net profit for the quarter and we will continue to grow this key market as the cost optimization program and network upgrades take effect. Sudan continues to grow due to the rollout of 4G services and the subsequent uptake of data services. We also anticipate improved performances in Iraq, where several tax and litigation issues have been resolved and the new leadership there can now focus on driving the business. Jordan continues to perform well maintaining its market leadership on all levels."

Regarding Zain’s home market of Kuwait, Al-Kharafi said: “We are working closely with the management team in overcoming the intense price competition that has impacted value for all operators, by offering a new range of services that we are confident will drive growth. We are investing heavily in expanding and upgrading our network in Kuwait that will further enhance the mobile experience of our customers.”

He highlighted that the group will continue to invest resources in data monetisation, enterprise (B2B) and smart city initiatives since these areas are growing at impressive rates. Zain is also focused on further innovation in digital services and plans to build on the recent partnerships and will continue to seek and collaborate with innovative technology players across the globe.

Operational review of key markets for Q1, 2017

Kuwait

Revenues: KD 79.5 million ($261 million)

Net income: KD 16.2 million ($53 million)

EBITDA: KD 31 million ($101 million)

EBITDA margin: 39%

Data revenues: 34% of total revenues

Customer base: 2.8 million

Iraq

Revenues: $253 million

EBITDA: $86 million

EBITDA margin: 34%

Customer base: 12.3 million

Sudan

Revenues: SDG 1.7 billion (+38%) $107 million (-43%)

Net income: SDG 258 million (+32%) $17 million (-45%)

EBITDA: SDG 594 million (+22%) $38 million (-49%)

EBITDA margin: 36%

Data revenues: 14% of total revenues (+66% in SDG terms)

Customer base: 13 million

Saudi Arabia

Revenues: SAR 1,919 million ($530 million) (+10%)

Net profit: SAR 45 million ($12 million) {compared to net losses of SAR 250 million ($67 million) in Q1, 2016 and SAR 135 million ($36 million) losses in Q4, 2016}

EBITDA: SAR 665 million ($177 million) (+49%)

EBITDA margin: 33%

Customer base: 10 million (slightly affected by the introduction of the biometric identification requirement)

Data revenues: 51% of total revenues (+46%)

Jordan

Revenues: $119 million (+2%)

Net income: $24 million

EBITDA: $58 million (+5%)

EBITDA margin: 49%

Data revenues: 36% of total revenues (+17%)

Customer base: 4.3 million (+6%)

Bahrain

Revenues: $50 million

EBITDA: $15 million

EBITDA margin: 30%

Customer base: 845,000 (+5%)

Data revenues: 43% of total revenues (+33%)

 

 

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