Zain Group reports 5% increase in net profit in 1H18

1 Aug 2018

Kuwait-based telecoms group Zain has published its consolidated financial results for the six months ended 30 June 2018, reporting ‘stable’ revenues of KWD503 million (USD1.66 billion), while EBITDA decreased 20% annually to KWD169 million. Zain highlighted that for financial reporting purposes, it had applied the new IFRS 9 and IFRS 15 accounting standards, with these having negatively impacted its key financial indicators in the period under review, particularly EBITDA. The company booked a net profit of KWD86 million in the twelve months under review, up 5% year-on-year. Zain disclosed that it incurred foreign currency losses amounting to USD9 million (net income) and USD94 million (revenue) for the six-month period to 30 June, predominantly due to a 40% currency devaluation in Sudan.

In operational terms, Zain Group reported a consolidated customer base of 47.4 million at 30 June 2018, up 5% y-o-y. In Kuwait subscriber numbers reached 2.8 million (up 7% y-o-y), while Jordan saw its customer base decrease to 3.7 million (down from 4.3 million). Zain Saudi Arabia’s subscriber base also decreased, to 8.4 million in H1 2018 (down 7% y-o-y), as a result of the government’s biometric identification project (which reduced the number of pre-paid SIMs to two per ID). Zain Iraq served 14.7 million users at end-June 2018, with nearly two million net additions over twelve months, while Sudan’s customer base increased 8% y-o-y to 13.9 million.

Group CEO Bader Al-Kharafi said: ‘In addition to the consolidated 5% net income growth and 5% customer growth, the first six months of 2018 produced numerous positive developments such as the operational progress being achieved in Kuwait, Iraq and Sudan, as well as the robust growth in our data monetisation, Enterprise (B2B), and smart city initiatives especially in our key 4G markets of Kuwait, Saudi Arabia, Bahrain and Jordan.’ The CEO also commented on the announcement that Zain Saudi Arabia will be treated as a subsidiary of Zain Group and its financial results will be consolidated with the results of Zain Group starting from the third quarter of 2018: ‘The impact of this consolidation will strengthen the Group’s financial indicators on various levels, except for net income, since Zain Group’s ownership in Zain KSA will not change.’

Kuwait, Saudi Arabia, Zain Group, Zain Saudi Arabia