Zain Group’s revenues, profit down in 1Q15 due to struggling Iraqi operations

13 May 2015

Kuwait-based telecoms giant Zain Group has published its consolidated financial results for the first quarter of the year (ended 31 March 2015), reporting a 10.3% annual decrease in revenues to KWD279 million (USD925 million), down from the KWD311 million reported in the corresponding period of 2014. In the three months under review, EBITDA reached KWD396 million, while the company booked a net profit of KWD41 million in Q1 2015, down 26.7% from the KWD55.9 million reported in the previous year. The company disclosed that the continued political instability in Iraq and heightened levels of competition in the market severely impacted its operations and the group’s overall key financial indicators.

In operational terms, Zain Group reported a 4.5% increase in its consolidated customer base, which reached 46.1 million at 31 March 2015. In Kuwait subscribers increased by 14% y-o-y, to 2.9 million, while Bahrain saw its customer base reach 785,000, mainly as a result of a USD100 million investment in a ‘total revamp and upgrade to 4G Long Term Evolution (LTE) technology.’ Zain Saudi Arabia’s subscriber base increased by 27% to 10.6 million in Q1 2015, while Zain Jordan signed up a total of 3.8 million users, a marginal decrease on the 3.9 million figure reported in 1Q 2014. Meanwhile, Iraq saw its customer base decease by 15.6% to 13.5 million, due to the escalation of political instability, coupled with frequent temporary network interruptions and associated higher operational costs.

Zain Group CEO, Scott Gegenheimer noted: ‘The quarter reflected mixed results in what were quite challenging conditions in several of our key markets, especially Iraq where the security situation and intense competition is significantly impacting the performance there and subsequently the group’s overall financials. Nevertheless we witnessed many positive signs of net income and customer growth during the first quarter of 2015 when compared to the final quarter of 2014 … All operations witnessed robust growth in data related revenues, and we will continue to develop this area of the business to take advantage of the explosion of data usage by our customers. We are continually upgrading and rolling out 4G enabled networks in Kuwait, Saudi Arabia, Jordan and Bahrain, and we expect the rollout of 3G services in Iraq to substantially improve performance there, anticipating that the security issues stabilise soon.’

Bahrain, Iraq, Jordan, Kuwait, Saudi Arabia, Zain Bahrain, Zain Group, Zain Iraq, Zain Jordan, Zain Kuwait, Zain Saudi Arabia