Industry Updates

Zain Group, a leading provider of innovative technologies and digital lifestyle communications operating in eight markets across the Middle East and Africa, announces its consolidated financial results for the third quarter (Q3) and nine-months (9M) periods ended 30 September 2024, serving 47.2 million customers.

Group Key Performance Indicators (KD and USD) 2024 for the first nine months (9M) 2024

For 9M-2024, Zain generated a 15-year high consolidated revenue of KD 1.45 billion (USD 4.71 billion), up 2% YoY. Consolidated EBITDA for the period reached KD 505 million (USD 1.65 billion), with normalized EBITDA growth (excluding number range claim) remaining stable YoY, reflecting an EBITDA margin of 35%. Net income for the 9-month period reached KD 136 million (USD 442 million) representing normalized net income growth of 6%, adjusted for number range claim and Tower transaction gain during nine-month period of 2023. Earnings per share amounted to 31 fils (USD 0.10) for the nine-month period.

Group Key Performance Indicators (KD and USD) for third quarter (Q3) 2024

In Q3 2024, Zain generated a 15-year high consolidated revenue of KD 501 million (USD 1.64 billion), up 4% YoY. EBITDA for the quarter reached KD 180 million (USD 589 million), reflecting a 36% EBITDA margin. Net income for the three months amounted to KD 54 million (USD 177 million), an increase of 1% YoY. Earnings per share for Q3 amounted to 13 fils (USD 0.04).

Key Operational Notes for 3M & 9M 2024

1. Interim cash dividend of 10 fils totaling KD 43.3 million (USD 141.5 million) was distributed to eligible shareholders on 06 October 2024 for the first half of 2024
2. The Q3 2024 performance is highlighted by net income growth of 9% in Zain Kuwait; 116% in Zain KSA; 82% in Zain Iraq; and 6% in Zain Jordan
3. Currency devaluation in Sudan negatively impacted Q3’24 key financial KPIs (currency devalued from SDG 638/USD in Sep’23 to SDG 1,982/USD by end of Sep’24)
4. 9M 2024 data revenue grew 1% YoY to reach USD 1.8 billion representing 38% of consolidated revenue
5. Zain invested USD 340 million in CAPEX, mainly FTTH expansion; spectrum acquisitions; and 4G and 5G upgrades
6. Fintech services witness revenue growth of 13% for 9M 2024 powered by Taman and Zain Cash
7. Overall Groupwide Enterprise revenue for 9M 2024 grow 6% including B2B Mobility
8. ZainTECH revenue for 9M 2024 grow 92% with the consolidation of STS Arabia and the expansion of regional offices in Bahrain and Saudi Arabia
9. Digital services including Dizlee API platform witness customer growth, driven by the addition of new gaming and streaming services
10. Digital operators ‘Yaqoot’ in KSA and ‘oodi’ in Iraq record 9-month revenue growth of 21% and 120%, respectively
11. Zain Group awarded ‘Excellence in implementing Innovative Data Architectures”

Chairman of the Board of Directors of Zain Group, Mr. Osamah Al Furaih said,

"The strong foundations we have established over the years continue to drive shareholder value and empower us to overcome the various socio-economic challenges across our footprint where we continue to implement purposeful ESG practices. Our investments in latest technologies, network upgrades, digital infrastructure, and new business verticals with a focus on exceptional customer experience delivery, have positioned Zain as the digital service operator of choice for consumers, enterprises, and governments.”

“On the back of the solid results achieved throughout the year, combined with our strong balance sheet and financial solvency, and in line with our declared 35 fils per share minimum dividend policy for three years commencing 2023, on October 6, 2024, we distributed 10 fils per share as interim dividends to shareholders. This is the fourth consecutive year we have done so, with this disbursement amounting to KD 43.3 million (USD 141.5 million).”

“The Board and the Group management team continue to work closely with our colleagues in Sudan to navigate the ongoing social unrest. Our focus is on ensuring the safety of our people and maintaining commercial operations, so the community remains connected. We are sincerely grateful to the various government authorities in Kuwait and across our markets for their support of the ICT sector, which empowers Zain to provide meaningful connectivity and drive systemic change.”

Zain Vice-Chairman and Group CEO, Bader Al-Kharafi commented,

“Across our markets, management teams have diligently and successfully overcome competitive and currency challenges, delivering excellent operational performances in line with expectations. Our operations in Kuwait, Saudi Arabia, Iraq, Jordan, and Bahrain have all reported solid year-on-year growth in their key financial metrics. Furthermore, we are witnessing robust revenue growth in our strategic business verticals, namely ZainTECH, Zain Omantel International and in our Fintech and Digital Services entities. These all-round efforts have resulted in Zain recording 15-year revenue highs for both the 3rd quarter and 9-month periods.”

“In Sudan, our concerted efforts to ensure network service availability combined with customer and price revamp initiatives are mitigating the impacts of the ongoing crisis. However, the substantial and unavoidable currency devaluation in the market continues to impact heavily an otherwise impressive operational quarter for the Group overall.”

"Five years ago we implemented our ‘4Sight’ profitability-focused growth strategy that has resulted in the implementation of significant digital transformation, cost optimization, and data monetization initiatives across all facets of the company’s business. This has been the main driver of our success and resilience in recent years. 4Sight also entailed the rollout of new business verticals, allowing us to capitalize on new and lucrative market opportunities in ICT, Fintech, Venture Capital, Digital Services, Esports, Towers and Wholesale business areas. We are confident that the positive momentum of these new business verticals and others in the pipeline, will create substantial shareholder value, as we focus on accelerating their growth.”

“The recognition for ‘Excellence in Innovative Data Architectures’ attained by Zain Group’s Data Office, in collaboration with ZainTECH, validates the company’s focus on becoming a leader in the ICT industry. By embracing a data-driven approach that is a catalyst for the uptake of AI, we are playing a pivotal role in turning potential into reality. We are empowering AI systems to learn, adapt, and drive innovation and digital transformation as our data practices help business users within Zain to access the right information at the right time, to make informed decisions for the company and customers alike.”

Operational review of key markets for the three month & nine month period ended 30 September, 2024

Kuwait: Zain Group’s flagship operation maintained its market leadership, with a customer base of 2.6 million. The Group’s most profitable operation saw revenue for the third-quarter (Q3 2024) grow 4% to reach KD 94 million (USD 308 million), EBITDA for Q3 grew 9% to reach KD 36 million (USD 119 million), reflecting an EBITDA margin of 39%. Q3 net income also grew 9% YoY to reach KD 23 million (USD 76 million). To maintain its growth momentum, the operator continues to invest in 5G upgrades and rollout out new appealing digital services enhancing its position as the operator of choice for consumers, enterprises and governments.

Saudi Arabia: Revenue for Q3 2024 grew 2% YoY to reach USD 689 million, with EBITDA growing 2% to reach USD 228 million, reflecting an EBITDA margin of 33%. Net income for Q3 soared 116% to reach USD 40 million. The operator’s 5G network, which now covers 66% of the country, powered a 4% growth in data revenue, accounting for 40% of total revenue in 9M-2024, while customer base expanded by 1% to reach 9 million customers. The company saw significant growth in revenue from the enterprise sector and widespread adoption of its ‘Yaqoot’ digital service and appeal of its fintech arm, ‘Tamam’.

Iraq: Revenue for Q3 2024 jumped 10% YoY to reach USD 285 million, with EBITDA growing 19% reaching USD 121 million, reflecting an EBITDA margin of 42%. Q3 net profit soared 82% to reach USD 39 million. 9M-2024 data revenue grew 27% representing 38% of total revenue. Operator’s customer base increased 8% to reach 19.5 million customers maintaining its market leading position. Socio-economic stability and operator’s renewed focus on expanding its network across the country combined with new digital offerings and optimization efficiencies, coupled with solid growth of its digital operator ‘oodi’, are the key drivers for these outstanding results.

Sudan: Revenue for Q3 2024 decreased 18%, when compared to Q2 2024, to reach USD 58 million, EBITDA dropped 34% when compared to Q2 2024 reaching USD 23 million, reflecting an EBITDA margin of 39%. However, net income for Q3 2024 grew 1% when compared to Q2 2024, reaching USD 34 million on account of USD 20m impairment of assets in Q2 2024. Customer base for Sudan reached 8.7 million.

Given the rapidly evolving situation and the significant currency devaluation in Sudan, the Q3 2024 performance has been compared to Q2 2024 instead of Q3 2023 to ensure a timely reflection of results.

Jordan: Q3 2024 revenue grew 6% YoY to reach USD 142 million, with EBITDA for Q3 growing 1% to reach USD 56 million, reflecting an EBITDA margin of 40%.Net income for Q3 grew 6% to reach USD 21 million. The ongoing expansion of 5G, FTTH and 4G services across the country led to data revenue growth of 7% for the 9M-2024, which now represents 51% of total revenue. Zain Jordan served 4.3 million customers, up 7%, maintaining its market leadership.

Bahrain: Revenue for Q3 2024 grew 13% YoY to reach USD 50 million, with EBITDA growing 11% YoY to reach USD 17 million, reflecting an EBITDA margin of 33%. Q3 net income increased 1% to reach USD 4.3 million. 9M-2024 data revenue grew 6% to represent 46% of total revenue. END

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About Zain Group: Zain is a leading telecommunications operator across the Middle East and Africa, serving 47.2 million active customers as of 30 September 2024. With a commercial presence in 8 countries, Zain provides mobile voice and data services in: Kuwait, Bahrain, Iraq, Jordan, Saudi Arabia, Sudan and South Sudan. Headquartered in UAE, ZainTECH, the Group’s one-stop digital and ICT solutions provider, is playing a key role in the transformation of enterprise and government clientele across the MENA region. Also, UAE based, Zain Omantel International (ZOI) is revolutionizing the international telecommunications wholesale landscape as the premier wholesale powerhouse serving regional operators, international carriers, and global hyper scalers. In Morocco, Zain has a 15.5% stake in ‘INWI’, through a joint venture. Zain is listed on the Boursa Kuwait (stock ticker: ZAIN). We recommend the Investor Community to download the “Zain Group Investor Relations” Mobile App. For more, please email info@zain.com or visit: www.zain.com; www.facebook.com/zain; www.twitter.com/zain; www.youtube.com/zain; www.instagram.com/zaingroup; www.linkedin.com/company/zain

Source: Press Release