Zain Group’s Q2 2022 Net Profit Soars 22% to KD50 Million

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KUWAIT, July 17: Zain Group, a leading telecommunications innovator operating in seven markets in the Middle East and Africa, announces its consolidated financial results for the six months ended June 30, 2022. Zain served 51.7 million customers at the end of the period, an increase of 7.1% year-on-year (YoY). In the second quarter of 2022 (Q2), Zain Group generated consolidated revenue of KD 421 million (USD 1.4 billion), up 14% year-on-year. EBITDA for the quarter reached KD166 million (USD544 million), up 9% year-on-year, reflecting an EBITDA margin of 40%. Net profit for the quarter was KD50 million ($165 million), up 22% year-on-year, reflecting earnings per share of 12 fils ($0.04). For the first six months of 2022 (H1), Zain Group generated consolidated revenue of KD 829 million ($2.7 billion), an increase of 10% year-on-year. EBITDA for the period reached KD 320 million ($1.1 billion), up 3% year-on-year, reflecting an EBITDA margin of 39%. Net profit was 98 million KD (321 million USD), up 14% year-on-year, reflecting earnings per share of 23 fils (0.07 USD).

Key operating notes for the first half of 2022

1. The board declares a second consecutive interim dividend of 10 fils per share for the first six months of 2022.

2. Data revenue reached $1.1 billion, or 40% of Group revenue.

3. During the six months, CAPEX investments were mainly focused on the expansion of Fiber to the Home (FTTH) infrastructure; spectrum usage fees; 4G upgrades; and new network sites in its markets, as well as 5G deployments in Kuwait, Saudi Arabia and Bahrain.

4. Zain Kuwait becomes the first telecom operator in the world to launch Vo5G with nationwide coverage; also completes the first live trial in the region for the 4G/5G open and cloud native radio access network (cRAN).

5. ZainTech, the enterprise arm of the Zain Group (B2B), is witnessing strong growth in all markets, attracting key regional customers and new partnerships, with B2B revenue growing 21% year-on-year.

6. Zain Group’s Application Program Interface (API) platform Dizlee is growing exponentially with 26 digital partnerships, offering 51 live services, translating into an impressive 5.5 million transactions per month and a 34% increase in revenue year-on-year.

7. Zain Esports in cooperation with Zain KSA launches PLAYHERA MENA gaming tournament platform targeting the region’s lucrative gaming market of approximately 100 million gamers.

8. Zain’s pure digital operator, “Yaqoot” in Saudi Arabia and “oodi” in Iraq, are experiencing robust growth.

9. The Zain Group publishes a thought leadership report entitled “The Climate Crisis – Reaching Net-Zero for a Sustainable Future”.

10. Zain Group received the award for “Best Telecom Operator” and ZainTech received the award for “Best Digital Service” at the Telecom World Middle East Awards 2022.

11. Zain awarded the World Finance Best Corporate Governance Award 2022 for Kuwait.

Ahmed Al Tahous, President of the Zain Group and Bader Al-Kharafi, Vice President and CEO of the group

Commenting on Q2 and H1 2022 results, Chairman of the Zain Group Board of Directors, Mr. Ahmed Al Tahous said, “The Board and management are focused on creating sustainable shareholder value through strong environmental, social and governance (ESG) practices, diligent investments in expanding upgrades 4G and 5G networks and looking for lucrative new lines of business to drive growth. We thank all government authorities in our markets for their proactivity in supporting the telecommunications sector as we strive to provide meaningful connectivity to the communities we serve.

Mr. Bader Al-Kharafi, Vice Chairman of Zain and Group CEO commented: “We are delighted with the company’s strong financial and operational performance for the first six months of the year, which has reassured the Board of Directors to declare a second consecutive semi-annual dividend of 10 fils per share. Our strong balance sheet and financial solvency are the result of the company’s success in executing its “4Sight” corporate strategy, which is to drive growth, digital transformation and optimal efficiency across all operations. Al-Kharafi continued, “Healthy revenue and net income growth in several key markets justifies the strategic investments we have made in recent years in network upgrades and cutting-edge digital platforms. By providing our retail and business customers with cutting-edge technologies and services, we improve our customer base and our revenue share in our markets.

“The 5G network at our flagship operation in Kuwait is driving a 9% increase in customers and generating multiple profitable revenue streams for governments and enterprises, driving an 11% increase for all key financial indicators – revenue, EBITDA and net income.” “Similarly, the 5G network and attractive data monetization initiatives in Saudi Arabia and Bahrain are driving growth on multiple levels. In Iraq, Jordan and Sudan, operations are profitably monetizing their 4G networks and we look forward to launching 5G services in these markets in the future, upon receipt of regulatory approvals.

“We recently applied for a digital banking license in Kuwait from Boubyan Bank and other investors, as we want to become the leading telecom operator-led challenger bank in Kuwait. We are focused on driving innovation and building on our success in the fintech space, given the outstanding achievements of Tamam in Saudi Arabia, Zain Cash in Iraq and Jordan, and MGurush in South Sudan. South.

“Our digital-only carriers ‘Yaqoot’ in Saudi Arabia and ‘oodi’ in Iraq both continue to generate healthy growth, delivering a simple mobile experience to customers via an app. “Furthermore, our business solutions arm ZainTech has gained tremendous ground to date, laying the foundation for exponential profitable growth. Our goal is to be the digital partner of choice for governments and businesses in our markets. Al-Kharafi concluded, “As a leading entity listed on Kuwait’s First Market, Zain seeks to exceed regulations issued by all financial regulatory bodies, including the Ministry of Commerce and Industry, the Capital Markets Authority and Boursa Kuwait.

Accordingly, it was a gratifying achievement to be recognized as having the best corporate governance practice in Kuwait for two consecutive years by World Finance Publishing House. This milestone rightly rewards the high ethical standards, transparency and professionalism of our Investor Relations, Corporate Governance and Sustainability teams towards all of our stakeholders.

Key Markets Financial KPIs for the six-month period (H1) ended June 30, 2022 serving 2.6 million customers.

The Group’s most profitable activity saw its revenue for the first half of 2022 increase by 11% to reach 173 million KD (567 million USD), with an EBITDA up 11% to 65 million KD (214 million USD). ), reflecting an EBITDA margin of 38%. The net income of the operator increased by 11% to reach 41 million KD (135 million USD). Data revenue increased 5% year-on-year and accounted for 38% of total revenue.

The operator continues to grow its 5G mobile and broadband customers, capturing the largest market share of 5G customers and revenue in the country.

Saudi Arabia: Revenue increased 14% year-over-year to $1.2 billion, with EBITDA of $398 million, reflecting an EBITDA margin of 34%. Net income increased 159% for the six-month period, reaching $57 million. The operator’s 5G network spanning more than 50 cities saw data revenue account for 44% of total revenue and customers served stood at 8.9 million, an increase of 21%.

Iraq: Revenue increased 4% to $390 million and EBITDA increased 16% to $168 million, reflecting an EBITDA margin of 43%, with net income reaching $5 million for the period. The operator’s customer base grew by 12% to reach 18 million customers, maintaining its leading position in the market.

Sudan: Revenue jumped 30% to $208 million, with strong EBITDA growth of 38% to $106 million, reflecting an EBITDA margin of 51%. Net income for the period increased 168% to $111 million. Data revenue grew by 44%, accounting for 31% of total revenue, with the customer base growing to 16.3 million, maintaining its leading position in the market.

Jordan: Revenue increased 2% year-on-year to $250 million, EBITDA reached $111 million, reflecting an EBITDA margin of 44%, with net profit reaching $41 million. With the continued expansion of FTTH and 4G services across the country, data revenue increased by 4%, accounting for 50% of total revenue. Zain Jordan served 3.7 million customers (up 4%) maintaining its market leadership.

Bahrain: Revenue increased 3% year-on-year to $89 million. EBITDA for the period increased 2% to $29 million, reflecting an EBITDA margin of 33%. Net revenue increased 3% to $7.6 million, with data revenue increasing 5% to 46% of total revenue.

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