Zain Group records Q1 net income of US$124 million

Kuwait : Zain Group, a leading mobile telecom innovator in eight markets across the Middle East and Africa, yesterday announced consolidated financial results for the first quarter ended 31 March, 2016. The company closed the period serving 45.5 million customers.

For the first quarter of 2016, the group recorded consolidated revenues of KD277 million (US$919m), a similar level to the same period in the previous year (Y-o-Y). Ebitda reached KD123m (US$407m), up 5 per cent Y-o-Y, reflecting an Ebitda margin of 44pc. Net income reached KD37m (US$124m), down 9pc Y-o-Y in KD terms reflecting Earnings Per Share of 10 Fils (US$0.03).

The group said it incurred foreign currency losses amounting to US$35m for the three-month period, a substantial US$28m increase from a US$7m impact for the same period in 2015, predominantly in Sudan and Iraq.

Commenting on the results, Chairman of the Board of Directors of Zain Group, Asaad Al Banwan said, “We are managing the highly changeable environments we face particularly with regard to the social unrest and hefty tax increases in Iraq that has impacted mobile consumption, as well as the intense price competition in our home market of Kuwait in a pragmatic manner, and we remain hopeful of the improving conditions across all our markets.”  

The Chairman continued, “We are pleased by the performance of our Jordan and Saudi Arabia operations having invested significantly in 3G / 4G network expansion upgrades and spectrum licenses there and in other markets to improve our customers’ mobile experience.”

Zain Group CEO, Scott Gegenheimer said, “Our data monetization initiatives on multiple fronts are bearing fruit across all key markets and we draw confidence from the 8pc growth in the uptake of data services, which now account for 21pc of overall service revenues. The Group will continue to foster and develop this key area of the business.”

In Bahrain, Zain generated revenues of US$43m for the quarter, down 9pc Y-o-Y. Ebitda for the period reached US$16m, down 11pc, and reflecting an Ebitda margin of 38pc. Net income amounted to US$2.4m, reflecting a 10pc decrease. Data revenues (excluding SMS & VAS) increased 6pc Y-o-Y, representing 37pc of overall revenues.  

The flagship operation of Zain Group in Kuwait saw its customer base serve 2.9m with revenues reaching US$278m. Net income came in at US$73m. Meanwhile, Zain Iraq generated revenues of US$270m, a decrease of 11pc Y-o-Y and net income of US$3m. In Sudan, the operator’s revenues grew by 6pc Y-o-Y to reach US$187m, while net income decreased 30pc to reach US$30m. 

Saudi operation served 11.5m customers at the end of the first quarter of 2016, posting improved financial results in all key financial indicators. Revenues grew 5pc Y-o-Y to reach US$482m while Ebitda grew 28pc to reach US$119m and net losses narrowed by 3pc to reach US$67m for the quarter. Zain Saudi Arabia’s Ebitda margin rose to 25pc, up from 20pc. Impressively, the operator witnessed a 69pc rise Y-o-Y in data revenues (excluding SMS & VAS), representing 31pc of total revenues as the company invested heavily and expanded its modern 4G LTE network. 

Zain Jordan grew its revenues by 6pc to reach US$117m, with net income increasing 12pc to reach US$24m.