Currency devaluations, intense competition affect Zain Group’s 1Q17 financials

3 May 2017

Kuwait-based telecoms giant Zain Group has published its consolidated financial results for the first quarter of the year (ended 31 March 2017), reporting revenues of KWD247 million (USD810 million), down 11% year-on-year, while EBITDA decreased 13% annually to reach KWD107 million. However, the company booked a net profit of KWD38 million in the three months under review, up 3% from the KWD37 million reported in the previous year. The company disclosed that it incurred foreign currency losses amounting to USD32 million in net income and USD68 million in EBITDA for the three-month period to 31 March, predominantly due to a 59% currency devaluation in Sudan. Excluding the currency translation impact, revenues would have grown by 4% y-o-y, while EBITDA and net income would have increased 3% and 27% respectively. Further, intense price competition in Kuwait coupled with additional operational costs in network expansion and upgrades severely impacted the operation and consequently Zain Group’s overall financial metrics.

In operational terms, Zain Group reported a consolidated customer base of 46.1 million at 31 March 2017, corresponding to a 1.4% increase y-o-y. In Kuwait subscriber numbers reached 2.8 million, while Jordan and Bahrain saw customer base increases to 4.3 million and 845,000 respectively. Zain Saudi Arabia’s subscriber base, meanwhile, decreased 13% to ten million in Q1 2017 as a result of the government’s biometric identification project, while Zain Sudan served 13 million users at that date, up from 12.2 million in 1Q16.

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