Kuwait – 12 February, 2020
Zain Group, a leading mobile telecom innovator in eight markets across the Middle East and Africa, announces its consolidated financial results for the full-year 2019, and fourth quarter ended 31 December, 2019. Zain served 49.5 million customers, reflecting a 1% increase year-on-year (Y-o-Y).
Group Key Performance Indicators (KD and USD) for the Full-Year 2019
For the full-year 2019, Zain Group generated consolidated revenue of KD 1.66 billion (USD 5.5 billion), an impressive 26% Y-o-Y growth, while consolidated EBITDA for the period rose by 40% Y-o-Y to reach KD 728 million (USD 2.4 billion), reflecting a healthy EBITDA margin of 44%. Consolidated net income reached KD 217 million (USD 715 million), up 10% and reflecting Earnings Per Share of 50 Fils (USD 0.17).
For the full-year, foreign currency translation impact, predominantly due to the 30% currency devaluation in Sudan from an average of 31.9 to 45.8 (SDG / USD), cost the Group USD 140 million in revenue, USD 61 million in EBITDA and USD 20 million in net income.
The Board of Directors of Zain Group recommended a cash dividend of 33 fils per share for 2019, and also as a first by a corporate entity in Kuwait, made another recommendation to implement a minimum cash dividend policy of 33 fils for the forthcoming two years, both subject to the Annual General Assembly and statutory approvals.
Group Key Performance Indicators (KD and USD) for the Fourth Quarter 2019
For the fourth quarter (Q4) of 2019, Zain Group generated consolidated revenue of KD 439 million (USD 1.4 billion), up 7% Y-o-Y. EBITDA for the quarter amounted to KD 191 million (USD 629 million), reflecting an EBITDA margin of 43.5%. Net income for the period amounted to KD 64 million (USD 211 million), up 8% Y-o-Y, representing Earnings Per Share of 15 fils (USD 0.05).
Key Operational Notes for 12 months ended 31 December, 2019
Operational review of key Zain markets for the 12 months ended 31 December, 2019
Kuwait: Maintaining its market leadership, the flagship and Zain Group's most profitable operation saw its customer base increase 7% to serve 2.8 million in a highly productive year that saw the operator launch commercial 5G services and rollout numerous innovative digital services to enterprises and individual customers. Revenue increased by 1% to reach KD 333 million (USD 1.1 billion), EBITDA increased by 10% to reach KD 126 million (USD 417 million) and net income up by 1% to reach KD 83 million (USD 273 million). Zain Kuwait reported an EBITDA margin of 38%, with data revenue growing 7% Y-o-Y, to form 37% of total revenue. During 2019, Zain Kuwait made substantial progress in its digital transformation launching numerous applications and operational efficiency initiatives to support the expansion of 25 smart branches and further enhancement of its interactive zBot chat digital channel on the WhatsApp platform, that reduced customer waiting times by 90%. Notably, as the first operator to launch 5G services in the country in June 2019, Zain attained the largest market share of 5G customers in Kuwait. The operator meticulously prepared itself for the launch of 5G and rolled out commercial services immediately on the availability of 5G smartphones and compatible mobile broadband routers.
Saudi Arabia: Zain KSA recorded its highest ever financial results for the year, generating revenue of SAR 8.4 billion (USD 2.2 billion), a 11% increase Y-o-Y, while EBITDA for the year increased by 27% Y-o-Y to reach SAR 3.8 billion (USD 1.02 billion), reflecting an EBITDA margin of 46%. Net income soared to reach SAR 485 million (USD 130 million), reflecting a 46% increase Y-o-Y. With the rollout of FTTH services and the largest commercial 5G network in the region, Zain KSA reported total CAPEX investment of SAR 1.9 billion (USD 512 million) for full-year 2019. The operator's total customer base stood at 7.6 million and data revenue represents 43% of total revenue.
Iraq: Zain Iraq's revenue was stable at USD 1.1 billion despite a competitive landscape and economic and political issues in Zain stronghold regions. EBITDA grew strongly by 10% Y-o-Y amounting to USD 465 million (43% EBITDA margin) based on the operational transformation program. Accordingly, the operation reported a net profit of USD 63 million for 2019, up 28% Y-o-Y. Zain Iraq's focus on customer experience, services expansion across the country and cost transformation combined with growth of data and digital revenue were key drivers of this exceptional performance. Retention and customer loyalty initiatives also resulted in the company serving 15.7 million customers.
Sudan: In local currency SDG terms, the operator continues to perform exceptionally well, as revenue grew by 43% Y-o-Y to reach SDG 13.9 billion (USD 304 million, down 4% in USD terms) for the full-year 2019. EBITDA increased by 52% to reach SDG 5.6 billion (USD 122 million, up 1% in USD terms), while net income increased 87% to reach SDG 2.3 billion (USD 49 million, up 11% in USD terms). Data revenue formed 18% of total revenue, with an impressive annual growth of 41% in SDG terms. The operation serves the largest customer base in the Group with 15.9 million customers.
Jordan: Maintaining market leadership, Zain Jordan served 3.6 million customers. Revenue was stable at USD 496 million, with EBITDA up 14% Y-o-Y to reach USD 221 million, reflecting an improved EBITDA margin of 45%. Net income reached USD 77 million, up 5% Y-o-Y. Expansion of fiber and 4G networks and related digital offerings including B2B services, saw data revenue represent 41% of total revenue.
Bahrain: Zain Bahrain generated revenue of USD 167 million, down 5% Y-o-Y. EBITDA for the period amounted to USD 56 million, up 35% Y-o-Y, reflecting an EBITDA margin of 33%. Net income amounted to USD 14 million, reflecting a 2% increase Y-o-Y. The operation recently revamped its 4G network and will soon launch 5G services. Data revenue represented 47% of overall revenue.
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