While several of Zain’s operations performed well, the group’s consolidated net income for first nine months of 2017 decreased 2% YoY to end at KD 122 million ($404 million). For the period, foreign currency translation impact, predominantly due to the 61% currency devaluation in Sudan from average rate of 6.4 (SDG / USD) in the year to date to September 2016 to 16.5, cost the company $441 million in revenue and $ 76 million in net income. Group data revenues (excluding SMS and VAS) witnessed a 3% growth for the first nine months of 2017, representing 25% of the Group’s total revenues.
Chairman of the Board of Directors of Zain Group, Mohannad Al-Kharafi said: "The concerted focus on expanding and exploiting our high-quality networks is proving instrumental as we recorded growth in several key financial metrics across many of our markets for the third-quarter and nine-month periods of 2017. Especially pleasing was the healthy revenue and net income growth in our home market of Kuwait and in Saudi Arabia where the turnaround continues to progress. The Board is working closely with management to maintain our market leadership and overcome the many socio-economic challenges across our footprint.”
Zain Kuwait remains one of the most efficient operations within the Group with a 40% EBITDA margin. For Q3, Zain Kuwait’s revenues and net income grew 6% and 10% YoY respectively.
Despite the exceptional socio-economic circumstances coupled with the continuation of intense price competition, Zain Iraq achieved $ 811 million revenues due to the impressive growth in data usage and numerous customer acquisition initiatives in the northern regions of the country. The operation’s efficiency drive saw EBITDA reach $281 million, reflecting a 35% EBITDA margin.
The turnaround and cost optimisation program in place at the operation, combined with investment in network upgrades and the introduction of data monetisation initiatives bolstered all key financial indicators for Zain Saudi for the first nine-months of 2017. The operator recorded its third consecutive quarterly net profit, which reflected in the operation reporting $15 million net profit for the first nine-month period, compared to net losses of $ 225 million for the same period in 2016. The company’s EBITDA margin rose to 34%.
“The third quarter and the immediate period beyond witnessed two major transactions that are value enhancing to our stakeholders and will have a profound positive effect on the future of our digital lifestyle strategy. The acquisition of treasury shares by Omantel brought immediate tangible benefit and so will the imminent sale of our telecom towers in Kuwait," said Bader Nasser Al-Kharafi, Zain Vice-Chairman and Group CEO.
He added that both the transactions will enhance Zain’s financial flexibility. "One transaction set the course for future co-operation with Omantel, in which the two companies will explore mutually beneficial synergies and business enhancing opportunities across the region. The other marked the beginning of a strategy to unlock value from our fixed infrastructure, which can be more efficiently deployed in new technologies and higher yielding investments. The selling of our telecom towers will be replicated in other markets further enabling us to focus on our core business and driving customer satisfaction.”
He further said that while the Sudan currency devaluation issue, has impacted overall results, nevertheless, Zain draws confidence from ‘the future prosperity of Sudan given the recent lifting of the US sanctions and expected appreciation of the country’s currency’.