Zain Group, a leading provider of innovative technologies and digital lifestyle communications operating in eight markets across the Middle East and Africa and serving 42.4 million customers, has registered solid operational performance for the first quarter across key markets with its consolidated revenue surging to hit KD466 million ($1.5 billion).
Announcing its consolidated financial results for the three-month period ended March 31, 2024, Zain said its ebitda for the quarter reached KD148 million ($480 million), reflecting an ebitda margin of 32%. Net income for the quarter reached KD29.2 million ($95 million), thus reflecting an earnings per share of 7 fils.
The tp telecom group said it had maintained stable revenue for the quarter due to strong top-line performance across main operations including Iraq (+14%), Kuwait (+7%), KSA (+5%) and Jordan (+3%).
This is despite the ongoing crisis and associated network operational challenges in Sudan where network services and coverage areas are gradually improving, it stated.
Group customer base was significantly impacted by the Sudan crisis due to damaging military attacks on business operating systems, inaccessibility to customer data centers, limited network coverage and retail distribution challenges.
Moreover, it is estimated that 6.5 million people have been internally displaced with 2 million migrating to neighbouring countries. Nevertheless, the recovery plan and new data center is seeing an exponential uptake in customers in Q2 2024, it added.
The decrease in Q1 2024 net income compared to the restated Q1 2023 net income, is mainly due to a one-time gain on sale and leaseback of the Zain KSA tower transaction.
The restatement of the Q1 2023 consolidated statement of profit and loss was due to the accounting of KSA tower transaction which was revisited in the Q4 2023 due to the significant judgements and estimations involved in assessing transfer of control. Excluding this impact of the restated KSA tower net profit gains, the drop in Q1 2024 Y-o-Y net income would be significantly less, it stated.
There is no impact on Zain Group of above restatement and reclassifications on the net profit and the consolidated financial statement reported and issued as at 31 December 2023, as all necessary adjustments required have already been accounted for in the consolidated financial statements for the year ended 31 December 2023.
For the three-month period, the data revenue grew 1% to reach $595 million, representing 39% of the group’s overall revenue. Also the group invested $39 million in Capex rolling out 5G and FTTH.
According to Zain, the Kuwait, KSA, Bahrain, and Jordan units continue to grow their 5G customer bases.
“The Board is working closely with executive management to address major socio-economic challenges in several key markets. In Sudan in particular, we acknowledge and pray for the safety of our dedicated workforce, who are making many personal sacrifices to provide meaningful connectivity to the local community. Zain Sudan is an important member of the Zain Group family and we will spare no efforts in supporting the team there to maintain the network and general operations,” stated its Chairman Osamah Al Furaih.
“Notwithstanding, we remain focused on mitigating the impact of the Sudan crisis through different Group-wide operational measures including cost optimization, network upgrades, driving enterprise revenues, and the development of new lucrative business verticals across our footprint. Moreover, our Environmental, Social and Governance practices continue to be at the forefront of our sustainability and business strategies,” he added.
Bader Al Kharafi, Zain Vice-Chairman and Group CEO, said: “Considering the excellent operational progress and digital transformation we have undertaken across our markets, it’s unfortunate that exceptional circumstances and network challenges in Sudan severely impacted our financial performance and customer base.”
“Nevertheless, we are pleased with the overall revenue growth across other key markets, and through our mitigation efforts, we are currently seeing improvements on multiple levels in Sudan from the many network service availability and customer initiatives we are undertaking,” he added.
