Zain Group, a leading provider of innovative technologies and digital lifestyle communications operating in seven markets across the Middle East and Africa, has announced its consolidated financial results for the first quarter (Q1) ended March 31, 2023. Over the past 12 months, Zain added 2.2 million active customers, a 4% increase to serve 53 million customers.
Zain Group generated consolidated Revenue of KD 468 million (USD 1.53 billion) for Q1 2023, up 15% year-on-year (YoY). EBITDA for the quarter reached KD 165 million (USD 540 million), up 8% YoY, reflecting an EBITDA margin of 35%. Net income for the quarter reached KD 54 million (USD 177 million), up 15 YoY reflecting an Earnings Per Share of 13 Fils (USD 0.04).
Key Operational Notes for Q1 2023
1. Zain Group consolidated data revenue grows 10% to reach USD 591 million, representing 39% of the Group’s overall revenue
2. During the quarter, Zain Group invested USD 112 million in CAPEX (tangible and intangible)
3. Kuwait, KSA, and Bahrain witness impressive growth in 5G customers
4. Zain KSA completes the sale of 8,069 tower assets to the Kingdom’s PIF for USD 807 million, transferring 3,600 out of the 8,069 tower assets. The ownership of the remaining towers will be transferred in batches in the coming quarters.
5. Zain Iraq finalizes the sale and leaseback as well as the management rights of 4,968 towers to TASC Towers Iraq (a subsidiary of Zain Group) for USD 180 million. The second phase to sell these towers to TASC Towers Holding will be concluded during second half of 2023.
6. Fintech services Group-wide witness exponential growth as total revenue soared five-fold, customer growth of 60% to reach 1.1 million customers with transaction value doubling
7. Enterprise revenue up 37% as ZainTech and local B2B teams secure multiple deals offering dynamic new and lucrative ICT services to businesses and governments.
8. Dizlee API platform and VAS digital services Group-wide witness revenue growth of 48%.
9. Zain’s digital operator Yaqoot in KSA, and oodi in Iraq, witness robust growth in revenue and customer growth YoY
10. Brand Finance, a leading valuation and strategy consultancy based in London, values the Zain brand at USD 2.74 billion, up 14% YoY
It is a distinct honor and privilege to be appointed as Chairman of Zain Group, a company with a proud history of having a positive socio-economic impact on communities across all the countries it has operated in over the years. I want to thank my predecessor, Mr. Ahmed Al Tahous for his contribution and legacy that took Zain to new heights, and I look forward to building on these strong foundations and working with fellow Board members and executive management to continue this upward trajectory of profitable growth and creation of shareholder value.
A key focus of the Board will be to ensure that our Environmental, Social and Governance practices continue to be at the forefront of our sustainability and business strategies. The Board also looks forward to constructive cooperation with telecom regulators and government authorities across our footprint given the vital role they play in supporting Zain to provide meaningful connectivity to the communities, businesses, and governments we proudly serve.
With sincere sadness and concern, we are mindful of the challenges faced by our operation in Sudan and its dedicated workforce that are making personal sacrifices to provide vital connectivity to the local community. We pray for their safety and are hopeful that the conflict will end soon.Mr. Osamah Al Furaih, Chairman of the Board of Directors, Zain Group
Our track record of sustainable growth sees Zain in solid financial position today, ideally positioned to invest further and exploit the next phase of growth in the telecom sector and beyond. The truly impressive Q1 2023 results are testament to the skilful execution of the company’s ‘4Sight’ strategy, focusing on innovative programs to improve the efficiency and profitability of the operations as well diversifying income sources from new lucrative business verticals in the digital and enterprise space.”
We have made giant strides in positioning Zain as the preferred digital lifestyle communications provider and transformation partner for our consumer, enterprises, and governments customers across our markets. Our future-ready approach to proficiently monetize the vast investments in 5G technology, 4G networks, and fiber expansion across all markets in recent years is paying off, evident by the 2.2 million additional customers and resulting revenue and net profit growth during Q1.
Our flagship operation in Kuwait continues to perform strongly, especially in the B2B sector, as well as through its introduction of Zain Max, a quad-play redefining a new generation of Internet and entertainment plans for postpaid customers. Similarly, the solid performances of our operations in Saudi Arabia, Sudan, and Iraq standout for the quarter, as the teams in these markets effectively navigate their respective competitive and socio-economic challenges.
The current conflict in Sudan is an unfortunate situation for humanity, and we are doing our utmost to maintain operational stability and provide connectivity to the community there. Crisis management teams have been established, implementing strategic initiatives to support our customers and workforce, and safeguard the network. Voice and data services remain functional in most parts of Sudan at this point, and we are doing everything in our power to ensure this remains the case, with Zain teams working 24/7. We are taking all reasonable measures to protect our people, assets, and commercial operations during this turbulent time and as soon as normality is restored, the entire network will become operational without much delay. Zain Sudan is a significant component of the Zain Group family given its outstanding performance in recent times, and we look forward to a peaceful solution in the country soon.
The exponential revenue and customer growth in several of our digital initiatives, particularly in regard to our fintech, pure digital operators in Saudi Arabia and Iraq, and the Dizlee API platform and related VAS activities, are extremely gratifying, and we will continue to foster their growth. We look forward to receiving a Digital Bank license in Kuwait soon, and we are actively preparing the go-to-market roadmap and resources to launch fintech services in the country thereafter.
We are proud to have one of the most powerful brands in the region and all that it represents with respect to providing meaningful connectivity and empowering and improving the lives of the communities we serve. This year’s 14% increase in brand valuation to reach USD 2.74 billion has been driven by the demonstrable developments within the company, where strong corporate governance, customer-centric initiatives, heavy investment in network upgrades, B2B strategies and digital innovation are all impacting stakeholders and customer experience positively. Our corporate sustainability program and talent development through our Diversity, Equity and Inclusion initiative, eye-catching marketing, and social media campaigns have captured the hearts and minds of the region.Mr. Bader Al-Kharafi, Vice-Chairman and Group CEO, Zain