Zain Group, the leading telecom innovator in seven markets across the Middle East and Africa, announces its consolidated financial results for the third-quarter (Q3) and nine-month periods (9M) ended September 30, 2022. The company added 3.5 million active subscribers to serve a total of 52 million customers, a 7% year-on-year (Y-o-Y) growth.Group Key Performance Indicators (KD and USD) for the nine months (9M) 2022Consolidated RevenueKD 1.3 billion - USD 4.2 billion EBITDAKD 491 million - USD 1.6 billion EBITDA Margin39% Net IncomeKD 152 million - USD 497 million EPS35 fils - USD 0.11 For 9M 2022, Zain Group generated consolidated revenue of KD 1.3 billion (USD 4.2 billion), up 12% year-on-year (Y-o-Y), while consolidated EBITDA for the period reached KD 491 million (USD 1.6 billion), up 3% Y-o-Y, reflecting a healthy EBITDA margin of 39%. Efficiency and optimization initiatives resulted in consolidated net income increasing 12% Y-o-Y, amounting to KD 152 million (USD 497 million). Earnings per share amounted to 35 fils (USD 0.11) for the nine-month period.Group Key Performance Indicators (KD and USD) for third-quarter (Q3) 2022Consolidated RevenueKD 441 million - USD 1.4 billion EBITDAKD 171 million - USD 555 million EBITDA Margin39%Net IncomeKD 54 million - USD 176 million EPS13 fils - USD 0.04 In Q3 2022, Zain Group generated consolidated revenue of KD 441 million (USD 1.4 billion), up an impressive 15% Y-o-Y. EBITDA for the quarter reached KD 171 million (USD 555 million), an increase of 2% Y-o-Y, reflecting a 39% EBITDA margin. Net income for the three months amounted to KD 54 million (USD 176 million), a 10% increase Y-o-Y. Earnings per share for Q3’22 amounted to 13 fils (USD 0.04).The significant increase in 9M consolidated net income is mainly due to the impressive performance of operations, particularly Kuwait, Saudi Arabia and Sudan. The subsiding of the pandemic and increased economic activity across all markets combined with appealing consumer digital service offerings centered around streaming and gaming, had a positive effect on the results. Furthermore, lucrative ZainTech and B2B monetization initiatives amplified investments made in 4G, 5G and FTTH expansion and upgrades, also drove revenue growth.Key Operational Notes for 9M 2022An interim cash dividend of 10 fils, totaling USD140 million was distributed in September 2022The 9M 2022 period was highlighted by the 109% Y-o-Y increase in net income at Zain KSA, a 140% net income increase at Zain Sudan and a 5% net income growth at Zain KuwaitData revenue grew 3% to reach USD 1.66 billion representing 40% of consolidated revenueThe first nine months saw Zain Group invest USD 316 million in CAPEX reflecting 8% of revenue, mainly in Fiber-to-the-Home (FTTH); spectrum fees; 4G upgrades and 5G rolloutsZain Jordan agreement with government includes extension of the current spectrum licenses for 10 years and a 25-year 5G licenseZain KSA expects to finalize the sale of its passive Tower infrastructure to the Kingdom’s Public Investment Fund led consortium for USD807 million in Q4, 2022Zain Bahrain receives approval from the Central Bank for a Fintech licenseCombined, Tamam in Saudi Arabia, Zain Cash in Iraq and Jordan, and M-Gurush in South Sudan increase their customer base by 34% with annual revenue growth of over 231%Digital services groupwide witness revenue growth of 47% Y-o-Y, inclusive of the Dizlee (API) platform, which continues its trajectory growth, offering 51 live services and resulting in over 175 million API transactions since launch in mid-2018Digital operator ‘Yaqoot’ in KSA saw revenue growth of 129% Y-o-YThe evolution of Zain Esports continues through the August 2022 launch of PLAYHERA MENA, a JV between Zain Group, Zain KSA and PLAYHERA. To date, Zain Esports has held 25 major tournaments, with 30,000 participants and acquired over 50 million social media impressionsZain joins the UN Global Compact initiative, a leadership platform for the development, implementation, and disclosure of responsible business practicesZain ranked best employer in Kuwait, among top-10 companies to work for in region by ForbesZainTech enters agreement to acquire BIOS Middle East, a regional cloud provider and receives two innovative awards from SAMENA Council-MEA Business Technology Achievement Awards. Chairman of Zain Group, Ahmed Al Tahous said, “These strong financial results underscore the Board and management’s focus on ensuring that investments in new growth opportunities, network upgrades and environmental, social and governance practices enhance shareholder value. We firmly believe that by providing meaningful connectivity that fosters equitable systemic change, we are empowering and improving the socio-economic well-being of the communities, businesses and government bodies we serve.”Zain Vice-Chairman and Group CEO, Bader Al-Kharafi commented, “This outstanding 9M operational performance is testament to the successful execution of our ‘4Sight’ growth strategy that has firmly strengthened the company’s financial position to fund future opportunities. Our focus on driving efficiencies, synergies and digital transformation across our operations, in tandem with investing in new business verticals and network upgrades, all rooted in sustainability and inclusivity at the core of everything we do, is paying off.”“With the global economy witnessing socio-economic challenges on multiple fronts, Zain’s track record of resilience and agility to adapt to a vastly changing environment, has prepared us well to tap into the many lucrative opportunities that may arise.”“As we drive the business forward seeking healthy cashflows, mainly through innovation in the consumer digital arena and the lucrative B2B space, our primary aims are to be the ICT partner of choice for governments and enterprises across the region and provide our individual customers an exceptional digital lifestyle experience.”“Our portfolio optimization strategy is well on track following the successful sale of our passive tower infrastructure in Kuwait, Jordan and soon KSA, with Iraq next in the pipeline. In Jordan, following the granting of a 25-year 5G license, we expect to be live with 5G services in H2’ 2023, a significant milestone in the Kingdom’s rich telecom history, given the socio-economic boost this technology will give to the Jordanian community.”“From a technology advancement point of view, another milestone was the deployment of our Nationwide Narrowband-IOT (Internet of Things) network in Kuwait and Bahrain, creating an exciting ecosystem for customers and enterprises.”“In Kuwait, the operation continues playing its pivotal and innovative role in support the country’s Vision 2035, recently highlighted by the launch of the world’s first Voice over 5G (Vo5G); the launching of cloud services in coordination with ZainTech; and successfully completing the first live trial in the region of Open and Virtual Radio Access Network (Open cRAN), firmly cementing Kuwait on the global ICT map. We look forward to attaining a Digital banking license in 2023 and offering our customers a range of dynamic Fintech services, fulfilling our aspirations of becoming the leading telco-led bank in Kuwait.”Al Kharafi concluded, “The adoption and successful implementation of comprehensive Sustainability and Diversity and Inclusion programs across our footprint have had an enormous positive impact on the work culture, and it was rewarding to be recognized in Forbes magazine global list as the best employer in Kuwait and top ten regionally for the second time.”Operational review of key markets for the nine months ended 30 September, 2022Kuwait: Maintaining its market leadership in all key performance indicators, Zain Group’s flagship operation saw its customer base grow notably by 12% to now serve 2.6 million customers. It remains the Group’s most profitable operation. 9M 2022 revenue grew 10% to reach KD 258 million (USD 844 million), EBITDA grew 8% to reach KD 99 million (USD 323 million), representing an EBITDA margin of 38%. Net income grew 5% to reach KD 61 million (USD 200 million) for 9M 2022, with data revenue growing 2% and accounting for 38% of total revenue.Saudi Arabia: For the 9M 2022, Zain KSA revenue grew 15% to reach SAR 6.7 billion (USD 1.8 billion), EBITDA for the period reached SAR 2.2 billion (USD 598 million), reflecting an EBITDA margin of 34%. Net income for the nine months grew 109% to reach SAR 299 million (USD 80 million). Data revenue represents 44% of total revenue and customers served stood at 8.6 million, a growth of 15%. The impressive net income is attributed to the increase in revenue driven by the growth in B2B, 5G, and the return of international Umrah and business visitors post the Kingdom relaxing COVID restrictions.Iraq: Zain Iraq’s 9M 2022 revenue grew by 5% to reach USD 601 million and EBITDA grew by 6% to reach USD 241 million, reflecting EBITDA margin of 40%. Net income reached USD 10 million for 9M 2022. The operator’s customer base increased by 11%, now to serve 18.4 million customers maintaining its market leading position.Sudan: For 9M 2022, Zain Sudan generated revenue of USD 339 million (up 41%), with EBITDA amounting to USD 178 million (up 51%), reflecting an EBITDA margin of 53%. The operation reported an impressive net profit of USD 174 million, reflecting a 140% increase in USD terms. Data revenue grew 60% YoY and represented 32% of total revenue, while the operator’s customer base reached 16.2 million, maintaining its market leadership. Price revamps to mitigate the currency devaluation along with data monetization and consumer centric initiatives were instrumental in the impressive financials.Jordan: For 9M 2022, Zain Jordan revenue increased by 2% to USD 382 million, EBITDA reached USD 170 million, reflecting a healthy EBITDA margin of 44%, with net income reaching USD 51 million. With the ongoing expansion of 4G services across the country, data revenue represented 50% of total revenue. Zain Jordan served 3.8 million customers (up 4%) maintaining its market leading position. With the recent 10-year extension of 2G, 3G and 4G licenses and the granting of a 25-year 5G license that will be commercially live in H2, 2023, the operation is well-primed for robust financial performance. Bahrain: Zain Bahrain generated revenue of USD 134 million for 9M 2022 (5% growth). EBITDA grew 2% to reach USD 44.3 million, reflecting an EBITDA margin of 33%, while Net income grew 1% to reach USD 12 million, for 9M 2022. Driven by its commitment to sustainability, the operation deployed the latest 5G Massive MIMO radio to reduce Zain's 5G site-level power consumption by 15%; the first telco to deploy this advanced solution in the Middle East and Africa.
