Zain Group Revenue Down to USD 1.3B in First Quarter

The company with operations in seven markets across the Middle East and Africa, announced its consolidated financial results for the first quarter ended March 31, 2021.

Zain served 48.5 million customers at the end of the period. Zain Group generated consolidated Revenue of KD 382 million (USD 1.3 billion) for the first quarter of 2021, down 6% year-on-year (Y-o-Y). EBITDA for the quarter reached KD 158 million (USD 523 million), down 7% Y-o-Y, reflecting an EBITDA margin of 41%. Net income for the quarter reached KD 45 million (USD 147 million), down 5% Y-o-Y reflecting an Earnings Per Share of 10 Fils (USD 0.03). Significantly, Zain Group net income grew operationally by 4% Y-o-Y for Q1, 2021, when excluding the one-time gain from the sale and lease back of towers in Kuwait during Q1 2020.

“The Board and Executive Management have been focused on minimizing the ongoing impact of COVID-19 and significant currency devaluations in Iraq and Sudan on the business. We are dedicated to ensuring our mobile networks are operating at optimal levels and providing meaningful connectivity to the communities we serve. I would like to thank all the government entities and regulatory authorities across our markets for their proactivity and cooperation with the telecom sector at large, in supporting operators, mobile consumers and societies during these times.”

Chairman of the Board of Directors of Zain Group, Mr. Ahmed Al Tahous

For Q1 2021, foreign currency translation was impacted mainly due to the currency devaluation in Sudan from 55 to 375 (SDG / USD) during end of February, and a 19% currency devaluation in Iraq from an 1,190 to 1,470 (IQD / USD), cost the Group USD 177 million in Revenue and USD 66 million in EBITDA. 

“The Group’s resilient performance for the quarter reflects the reality of the unavoidable combination of both COVID-19’s ongoing disruption on socio-economic activity and the impact of currency devaluations on the business. Nevertheless, our culture of innovation has been invaluable at this time of rapid change, and our business continuity strategy has been executed impressively to counter these factors. Management has proactively undertaken numerous decisive digital transformation and cost optimization initiatives while maintaining healthy cash flows, and both Zain Iraq and Zain Sudan have recently taken measures in dealing with currency devaluations by revamping prices and offering new attractive data monetization packages.”

Mr. Bader Nasser Al-Kharafi, Zain Vice-Chairman and Group CEO

Zain Group’s resilient results for Q1 2021 were achieved despite the widespread disruption in economic and social activity caused by COVID-19, further compounded by the recent and significant currency devaluations in Iraq and Sudan. 

It should be noted that the impact of the pandemic on the business was minimal during Q1 ‘2020, given its early stage of spread at the time, however in Q1 2021 the impact was more profound.

“Given the limitations on mobility, locally and travel abroad, we have continued to play a key role in keeping people socially distanced while remaining connected and productive during the current learning and working from home environment. All Zain operations’ response to these modified circumstances has been nothing but exemplary. We implemented additional digitalization initiatives to better serve businesses, governments, and communities, granting them increased digital access to everyday life and essential medical and commercial services, aiming to lessen the impact of the pandemic on the societies we serve.”

Mr. Bader Nasser Al-Kharafi, Zain Vice-Chairman and Group CEO

Throughout the quarter, Zain Group invested USD 415 million in CAPEX (tangible and intangible) reflecting 33% of total revenue, predominantly in expansion of Fiber-to-the-Home (FTTH) infrastructure, spectrum fees, 4G upgrades and new network sites across its markets, as well as ongoing 5G rollouts in Kuwait, Saudi Arabia and Bahrain 

“Our operational focus has been centered on expanding and monetizing our 4G, FTTH and 5G networks creating vast and lucrative opportunities particularly related to Enterprise (B2B) services to government and businesses of all sizes. At the same time, we continue to make significant progress in raising the company to new heights and maximizing value for shareholders through our ‘4Sight’ strategy. We are evolving the company’s core telecom business and building on its many strengths to selectively invest in growth verticals beyond standard mobile services.”

Mr. Bader Nasser Al-Kharafi, Zain Vice-Chairman and Group CEO

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