Kuwait-based telecoms giant Zain Group has published its consolidated financial results for the twelve months ended 31 December 2014, reporting a 3.2% annual decrease in revenues to KWD1.20 billion (USD4.06 billion), down from the KWD1.24 million reported in the corresponding period of 2013. In the twelve months under review, EBITDA reached KWD1.8 billion, while the company booked a net profit of KWD194 million in 2014, down 10.4% from the KWD216.4 million reported in the previous year.
The company disclosed that the recent appreciation of the US dollar against the Kuwaiti dinar and foreign currency revaluation, predominantly in the Republic of Sudan, affected earnings negatively by KWD43 million in 2014; excluding the currency variance impact, net profits ‘would have been relatively stable for the full-2014’. As mandated by its mobile operating licence, Zain Bahrain completed an initial public offering (IPO) of 15% of its share capital on 30 September 2014 – all of the new shares were distributed on 9 October 2014. Further, in November Zain Saudi Arabia recommended a reduction of the company’s share capital and awaits final approval by the general assembly; the capital reduction gained the approval of the market authority in January 2015.
In operational terms, Zain Group reported a 4% decrease in its consolidated customer base, which reached 44.3 million at 31 December 2014. In Kuwait subscribers increased by 6% y-o-y, to 2.7 million, while Bahrain reported 2% growth in its customer base to 788,000 over the same period. Zain Saudi Arabia’s subscriber base increased by 7% to 9.011 million in 2014, up from 8.461 million reported in the previous year, while Lebanon saw a 5% customer growth in the period under review, to 2.142 million. Meanwhile, Iraq saw its customer base decease by 13% to 13.768 million, due to escalation of political instability coupled with frequent temporary network interruptions and associated higher operational costs. Elsewhere, Sudan reported a total of 11.372 million users, down 3% y-o-y due to a SIM registration process, while South Sudan’s subscribers decreased by 15% to 692,000. Further, Zain Jordan signed up a total of 3.849 million users, a marginal 1% decrease on the 3.900 million figure reported in 3Q 2013.
Zain Group CEO, Scott Gegenheimer noted: ‘Due to number factors beyond Zain’s control, the year proved to be especially challenging and it is disappointing to report declining financial results for the full year considering the sound operational progress and transformation we have undertaken across all our markets. Nevertheless we remain focused on growing the business in all our markets and we are committed to our strategy that will take advantage of our competencies, which include our people, brand, quality networks and geographic coverage, while looking to develop new areas and becoming a diversified and innovative digital operator.’