Saturday 7 December 2019

Zain Group records $3.6bn revenue in 2016

KUWAIT, February 20, 2017

Zain Group, a leading mobile telecom innovator in eight markets across the Middle East and Africa, has generated consolidated revenues of KD1.1 billion ($3.6 billion), down four per cent over the previous year.

Announcing its fourth quarter results ended December 31, 2016, Zain said the group's consolidated ebitda for the period grew three per cent year-on-year (y-o-y) and reached KD512 million ($1.7 billion), reflecting a healthy ebitda margin of 47 per cent.

Zain served 47 million customers at the end of 2016, reflecting a three per cent increase year-on-year (y-o-y).

The consolidated net income reached KD157 million ($519 million), up two per cent and reflecting earnings per share of 40 Fils ($0.13), it stated.

For the full-year 2016, foreign currency translation impact, predominantly due to the 60 per cent currency devaluation in Sudan from 6.4 to 15.9 (SDG / USD) in the beginning of November 2016, cost the company $92 million in revenue, $38 million in ebitda and $44 million in net income.

The board of directors of Zain Group have recommended a cash dividend of 35 Fils per share subject to the annual general assembly and regulatory approvals.

For the fourth quarter of 2016, Zain Group recorded consolidated revenues of KD261 million ($860 million), down eight per cent over the same period of the previous year (Q-o-Q).

The ebitda for the quarter reached KD122 million ($400 million), reflecting a healthy ebitda margin of 47 per cent. Net income for the quarter reached KD 32 million ($106 million), reflecting EPS of 8 Fils ($0.03).

Specifically, for the fourth quarter, the currency translation impact cost the company $83 million in revenue, $33 million in ebitda and $42 million in net income, again predominantly due to Sudan currency devaluation from 6.4 to 15.9 (SDG / USD), a 60 per cent decrease.

Commenting on the results, the Zain Group chairman Asaad Al Banwan said: "The board is pleased to record relatively stable financial results; an achievement by the management given the many socio-economic challenges facing all our operations. The currency issue in Sudan in the last quarter of 2016 had an adverse impact on the results, as did the settlement of cumbersome litigation in Iraq that resulted in a payment of $93 million."

"Nevertheless, we draw confidence from both the freeing of our cash deposits in Iraq and the favorable gesture by the Saudi leadership in extending our license in the Kingdom by an additional 15 years, which had a positive impact on the operation’s financials and growth strategy, he noted.

Al Banwan said Zain had invested significantly in 3G/4G network expansion upgrades across all its markets in order to improve the mobile experience for customers.

"Our investments in capital expenditure reached $635 million (excluding Zain Saudi Arabia), which represents 18 per cent of our revenues, reflecting Zain’s commitment to innovation and quality of service," he noted.

Group CEO Scott Gegenheimer said considering the sound operational progress and transformation it has undertaken across all the markets, it’s unfortunate that exceptional circumstances such as the currency issue in Sudan and the tax settlements in Iraq affected the group's financial performance.

Had these issues not sprung up, the results would have been very positive, he stated.

"Nevertheless, we are pleased with the progress of our cost optimization initiatives have had in driving efficiency, resulting in an impressive 47 per cent ebitda margin for the year," he remarked.

Gegenheimer expressed delight at the success of its data monetization and Enterprise (B2B) initiatives across all its operations, both of which are fast-growing and profitable business areas.

"During 2016 in key operations, we built-up dedicated B2B business units and premium B2B care models, installed state-of-the-art IoT/M2M platforms as well as developing new service propositions for Small Medium Enterprises and small home offices, leading to high-double digit sales growth. We are excited by the enormous potential that B2B offers and will continue to invest in and develop this strategic area of the business," he noted.

On its future strategy, Gegenheimer said: "Our strategic investment in smart city solutions are starting to reap benefits and we expect exponential growth in this lucrative key area."

"We are committed to our strategy that will leverage our strengths, including our people, brand, customer experience, cutting edge technology innovations, and geographic coverage in our bid to become a diversified and innovative digital lifestyle operator," he added.-TradeArabia News Service

Tags: Telecom | Revenue | Zain Group | Net Profit |

More IT & Telecommunications Stories

calendarCalendar of Events