Kuwait Times, Thu, Mar 07, 2024 | Shaban 26, 1445
Zain Group 2023 revenue up 10% to reach $6.2bn: Bader Al-Kharafi
Kuwait:
Zain Group, a leading
provider of innovative technologies and digital lifestyle communications
operating in eight markets across the Middle East and Africa, serving a customer
base of 50.6 million, announced its consolidated financial results for the
full-year 2023, and fourth quarter ended Dec 31, 2023.
For the full-year 2023, Zain Group generated consolidated revenue of KD 1.9
billion ($6.2 billion), a Y-o-Y increase of 10 percent. Consolidated EBITDA for
the period increased by 5 percent Y-o-Y, to reach KD 705 million ($2.3 billion),
reflecting an EBITDA margin of 37 percent. Consolidated net income reached KD
215 million ($701 million), up 10 percent Y-o-Y and reflecting earnings per
share of 50 fils ($0.16).
Board H2 2023
dividend recommendation
The Board of Directors of Zain Group recommended a cash dividend of 25 fils per
share for the second half (H2) of 2023.This dividend follows the semi-annual
dividend of 10 fils distributed earlier in 2023, totaling 35 fils per share for
the year and reflecting a 70 percent payout ratio, one of the highest among
listed entities in the region and in line with the Board’s previously committed
minimum cash dividend policy of 35 fils in total, for three years that commenced
in 2023.
For the fourth quarter (Q4) of 2023, Zain Group generated consolidated revenue
of KD 494 million ($1.6 billion), up 8 percent Y-o-Y. EBITDA for the quarter
amounted to KD 174 million ($565 million), reflecting an EBITDA margin of 35
percent. Net income for the period amounted to KD 43 million ($140 million),
representing earnings per share of 10fils ($0.03).
Key operational notes
for Q4 and 12 months ended Dec 31, 2023
1. Throughout 2023, Zain Group invested $994 million in CAPEX representing 16
percent of revenue, mainly on 4G and 5G rollouts,and expansion of FTTH
infrastructure and spectrum license fees
2. Consolidated data revenue grew 8 percent to reach $2.4 billion, representing
39 percent of the Group’s revenue for the year.
3. Agreement with Ooredoo Group and TASC Towers to create the largest tower
company in MENA region valued at $2.2 billion with nearly 30,000 towers across
six countries.
4. Tower sales and leaseback in KSA, Kuwait, Jordan and Iraq boosting
efficiencies and net profit.
5. Zain Jordan launches 5G services, making it the fourth Zain operation
offering 5G.
6. Zain KSA launched the world’s 1st zero-carbon 5G network in the Red Sea.
7. ZainTECH acquires STS, a leading regional digital transformation solutions
provider.
8. Group wide B2B revenues inclusive of ZainTech grew 20 percent as a result of
dynamic ICT services.
9. Zain Omantel International established a unique PAN Middle Eastern network,
complemented by extensive global assets including AFRICA ONE, PEACE, and Blue
Raman subsea cables.
10. Group wide FinTech customers grew 40 percent Y-o-Y, with revenue up 195
percent Y-o-Y, and total transaction volume tripling to reach $11 billion.
11. Launch of new FinTech brand ‘Bede’ in Bahrain offering microfinance
services.
12. Digital services group wide witness revenue growth of 9 percent Y-o-Y,
inclusive of Dizlee (API) platform offering 81 live services, and counting over
275 million API transactions since launch in mid-2018.
13. ‘Best Telecom and Corporate Governance’ company in Kuwait by International
Finance Magazine.
14. Zain’s Diversity, Equity & Inclusion (DEI) program acknowledged with two
awards at the SAMENA Council endorsed MEA Business Achievement Awards.
15. Zain maintains region’s highest A- rating on the ‘CDP Score Report–Climate
Change 2023’, among the leaders globally; commits to Science-Based Targets
initiative emission guidance.
16. Zain brand valuation grows 11 percent to $3 billion according to Brand
Finance 2024 rankings.
Commenting on the 2023 full year results, the Chairman of the Board of Directors
of Zain Group, Osamah Al-Furaih said, “It was a momentous year for Zain on
multiple levels as the Board worked together with the executive management team
on increasing shareholder value by evolving the business and implementing
noteworthy ESG initiatives. Our focus on operational efficiency, network
upgrades, driving enterprise revenues and the development of new lucrative
business verticals were instrumental in achieving these 2023 impressive
results.”
The Chairman continued, “The Board is confident of the company’s readiness to
exploit the next phase of growth of the numerous technologies and digital
services we provide across our footprint. I would like to recognize the
government bodies in Kuwait and across our markets for supporting the telecom
sector and empowering Zain to provide meaningful connectivity to the
communities, businesses, and governments we serve.”
Zain Vice-Chairman and Group CEO Bader Al-Kharafi commented, “Our Group-wide
efforts in monetizing innovative digital services and enterprise solutions on
the back of our state-of-the-art networks and technologies, combined with cost
optimization initiatives and passive Tower infrastructure strategy, are driving
strong operational and financial performance on all our KPIs.”
“Accordingly, we are in a solid position to recommend a H2 dividend of 25 fils
(following the 10 fils earlier in H1) that will result in the second consecutive
total annual dividend of 35 fils, reaffirming the commitment we made at the
beginning of 2023. This reflects an annual 70 percent payout ratio, one of the
highest in the region providing a strong indication of our healthy balance sheet
and financial solvency as the Board and management cooperate to grow the
business in a sustainable manner.”
“Across all our markets, our management teams are being very agile in dealing
with the many socio-economic and competitive challenges and this is reflected in
the overall financial results. In Kuwait, the operation delivered impressive
results for the year on all levels and the marketing partnership with digital
operator Red Bull Mobile is experiencing impressive growth, successfully
targeting the youth offering appealing options for prepaid voice and internet
services. Likewise, our other digital operators in KSA (Yaqoot) and Iraq (oodi)
are witnessing robust growth offering the latest innovative technologies and
services to customers.”
“We are very pleased with the impressive operational performance of our
operations in KSA, Iraq, Sudan, Jordan and Bahrain, all delivering year on year
growth in their financials. The completion of the sale and leaseback of our
network towers in KSA and Iraq during 2023 are driving efficiencies on multiple
levels and contributing to their financial performances, following the success
we had in the pioneering tower sales in Kuwait and Jordan previously.”
“In late 2023, Zain further solidified its position as the regional leader in
the tower arena, with a pioneering agreement with Qatar’s Ooredoo Group and TASC
Towers, which aims to incorporate nearly 30,000 towers across six countries,
combining our respective passive infrastructure portfolios with a combined
estimated current enterprise value of $2.2 billion. This value creative
agreement for all parties is progressing in stages, and we are very appreciative
of Ooredoo’s management for raising the notion of collaboration and
regionalization to an entirely new level.”
“Throughout the year, we continued to invest heavily in network expansions,
upgrades and technologies that drove data and B2B related revenues. Notably,
Zain Jordan became the first operator in the country to launch 5G commercial
services in December 2023, becoming the fourth Zain operation to offer 5G
technology, firmly placing Zain as the region’s leading provider of this
exclusive high-speed and reliable service.”
“ZainTECH witnessed several milestones during the year, growing both organically
and through acquisitions, notably that of STS in October 2023, a leading
regional digital transformation solutions provider. This acquisition will
further boost the 20 percent annual growth witnessed in B2B revenues across our
footprint reflecting the sound cooperative business model between ZainTECH and
our local operations’ B2B teams in making Zain the connectivity and enterprise
partner of choice.
“Early in 2024, we launched the Bede fintech brand in Bahrain which is set to be
rolled out across our footprint. Bede stems from Arabic meaning of “in my hand”,
catering to consumers’ lifestyles and emerging demands beyond basic telecom
services. In Bahrain, this Shariah-compliant AI powered platform offers consumer
micro-finance in minutes over a mobile app and will be developed in the future
to offer a variety of financial services and products. The impressive and
profitable growth of Tamam in Saudi Arabia, and Zain Cash in Iraq and Jordan has
firmly established these FinTech entities as market leaders for the unbanked and
underbanked in their respective markets. We will continue to foster their growth
through innovation.”
“Across our footprint, Zain is guided by the four pillars of our five-year
corporate sustainability strategy, centered on Climate Change, Social Business,
Inclusion, and Generation Youth. Notably, the A- score that Zain maintained in
the latest ‘CDP Score Report–Climate Change 2023’, positioned us first in the
region and among leaders globally with respect to climate control initiatives.
Our Diversity, Equity and Inclusion (DEI) program continues to be a conducive
force within, boosting the company’s productivity and overall morale and much
more. It’s rewarding to see this initiative being recognized through various
awards from organizations.”
“On a final note, BrandFinance’s recent valuation of the Zain brand that saw it
increase 11 percent from $2.7 billion to $3 billion is a testament to the
investment Zain has placed in establishing its name and identity over the past
17 years. The successful media campaigns, having 23 million social media fans
and over 250 million video views annually, the many corporate sustainability,
DEI initiatives we have introduced over the years, combined with our ongoing
innovation and investment in network upgrades that result in quality mobile and
digital services and exceptional customer experience, has made Zain one of the
most inspirational and recognized corporate brands in the region and beyond.”
Financial KPIs of key
markets for 12 months ended Dec 31, 2023
KUWAIT: Maintaining
its market leadership, the flagship operation saw its customer base increase by
4 percent to serve 2.7 million customers. The Group’s most profitable operation
saw its full year 2023 revenue grow by 5 percent Y-o-Y to reach KD 360 million
($1.2 billion), with EBITDA increasing by 18 percent to KD 156 million ($509
million), reflecting an EBITDA margin of 43 percent. For the full year, the
operator recorded net income of KD 104 million ($339 million) reflecting a 26
percent increase. Data revenue represented 37 percent of total revenue.
SAUDI ARABIA: The
operator generated revenue of $2.6 billion up 9 percent Y-o-Y, with EBITDA
amounting to $794 million, reflecting an EBITDA margin of 30 percent. Net income
for the year soared 131 percent to reach $338 million. With its dynamic 5G
network covering 54 cities, data revenue represented 40 percent of total revenue
and customers served stood at 8.9 million, up 3 percent.
SUDAN: Despite the
ongoing conflict, the operator generated revenue of $558 million, up 14 percent,
with EBITDA amounting to $269 million, up 7 percent and reflecting an EBITDA
margin of 48 percent. Net income for the period reached $216 million. Data
revenue grew by 22 percent, representing 35 percent of total revenue, while the
operator’s customer base stood at 14.2 million, maintaining its market
leadership.
IRAQ: Revenue
reached $974 million up 20 percent, and EBITDA amounted to $375 million up 16
percent Y-o-Y, reflecting an EBITDA margin of 39 percent. Net profit reached $88
million compared to $15 million last year. The operator’s customer base reached
17.9 million customers.
JORDAN: Zain Jordan
revenue increased 3 percent to reach $525 million, EBITDA reached $217 million,
reflecting an EBITDA margin of 41 percent. Net income for the year increased 10
percent to reach $76 million. With the expansion of 4G and launch of 5G services
across the country, data revenue grew 1 percent representing 50 percent of total
revenue. Zain Jordan customer base grew by 3 percent to reach 3.9 million
customers, maintaining its market leading position.
BAHRAIN: The
operator generated revenue of $192 million, up 7 percent Y-o-Y. EBITDA increased
2 percent to reach $60 million, reflecting an EBITDA margin of 31 percent. Net
income grew 2 percent to reach $15.4 million, with data revenue growing 6
percent to represent 47 percent of total revenue.
Highlights
•Q4 2023 revenue KD 494 million ($1.6 billion), net profit KD 43 million ($140
million)
•Key operations in Kuwait, KSA, Iraq and Jordan deliver impressive net profit
growth
•Jordan becomes the 4th Zain operation to offer 5G services
•Data revenue grew 8 percent, represents 39 percent of total revenue
•Digital services revenue up 9 percent; Fintech customer growth of 40 percent,
revenue soared 195 percent
•Enterprise revenues up 20 percent as ZainTECH and local B2B teams target
strategic clients
•Tower sales and leaseback in KSA, Kuwait, Jordan and Iraq creating value and
efficiencies
•Zain maintains region’s highest A- rating on the ‘CDP Score Report–Climate
Change 2023’
•Zain brand valuation reaches a milestone $3 billion, up 11 percent year over
year