Zain Group’s revenues down 7% y-o-y in Q2 2020

16 Jul 2020

Kuwait-based telecoms group Zain has published its consolidated financial results for the three months ended 30 June 2020, reporting a 7% decrease in revenues year-on-year to KWD378 million (USD1.22 billion), while EBITDA decreased 7% annually to KWD165 million. The company booked a net profit of KWD36 million in the three months under review, down 28% y-o-y. Zain claims its ‘resilient results’ were achieved despite the widespread disruption in economic and social activity; to counter the impact of the COVID-19 pandemic on Zain Group financials, management took decisive cost optimisation measures in areas such as contracts renegotiation, management of cashflows and loan repayments, which succeeded in reducing operational expenses by USD68 million.

In operational terms, Zain Group reported a consolidated customer base of 47.6 million at 30 June 2020, down 3% y-o-y. In Kuwait subscribers decreased 7% y-o-y to 2.6 million, while the Saudi Arabian unit served 7.1 million subscribers (down from 8.6 million in Q2 2019). Zain Sudan’s subscriber base stood at 15.7 million at 30 June 2020, up 4% y-o-y. Zain Iraq, meanwhile, saw its customer base decrease 3% y-o-y to serve 14.9 million users at end-June 2020, while the user base in Jordan contracted by 8% to 3.4 million. Zain highlighted that in July 2020 Zain Iraq’s mobile license was extended for an additional eight years to expire on 30 August 2030, with the operator planning to launch 4G services in early 2021.

Mr. Bader Nasser Al-Kharafi, Zain Vice-Chairman and Group CEO, commented: ‘The Group’s performance in the first half of the year reflected Zain’s resilience to turbulence, given the numerous operational challenges in these unique times. The Board has been working closely with management in minimizing the impact of COVID-19 on the business as well as ensuring the mobile networks are at optimal performance … We have invested USD1.5 billion in CAPEX including spectrum fees over the last 18 months, launching 5G networks in Kuwait, Saudi Arabia and most recently Bahrain, as well as upgrading and expanding our 4G networks and FTTH services across our footprint. Doing so allows us to offer more innovative services to our customers in government, business, IoT, and smart city sectors, bolstering the digital economy in these areas. 5G technology will create vast opportunities in the value chain proposition in numerous industries and will push the telecom sector to a new and exciting phase of growth.’

Kuwait, Zain Group