Zain Group’s nine months 2022 net profit soars 12% to reach USD 497 million

Zain Group, the leading telecom innovator in seven markets across the Middle East and Africa, announces its consolidated financial results for the third-quarter (Q3) and nine-month periods (9M) ended September 30, 2022. The company added 3.5 million active subscribers to serve a total of 52 million customers, a 7% year-on-year (Y-o-Y) growth.

Group Key Performance Indicators USD for the nine months (9M) 2022

FConsolidated FRevenue	USD 4.2 billion
EBITDA	USD 1.6 billion
EBITDA Margin	39%
Net Income	USD 497 million
EPS	USD 0.11

For 9M 2022, Zain Group generated consolidated revenue of USD 4.2 billion, up 12% year-on-year (Y-o-Y), while consolidated EBITDA for the period reached USD 1.6 billion, up 3% Y-o-Y, reflecting a healthy EBITDA margin of 39%. Efficiency and optimization initiatives resulted in consolidated net income increasing 12% Y-o-Y, amounting to USD 497 million. Earnings per share amounted to USD 0.11 for the nine-month period.

Group Key Performance Indicators USD for third-quarter (Q3) 2022

Consolidated Revenue	1.4 billion
EBITDA	USD 555 million
EBITDA Margin	39%
Net Income	USD 176 million
EPS	USD 0.04

In Q3 2022, Zain Group generated consolidated revenue of USD 1.4 billion, up an impressive 15% Y-o-Y. EBITDA for the quarter reached USD 555 million, an increase of 2% Y-o-Y, reflecting a 39% EBITDA margin. Net income for the three months amounted to USD 176 million, a 10% increase Y-o-Y. Earnings per share for Q3’22 amounted to USD 0.04.

Key Operational Notes for 9M 2022

• An interim cash dividend of 10 fils, totaling USD140 million was distributed in September 2022
• The 9M 2022 period was highlighted by the 109% Y-o-Y increase in net income at Zain KSA, a 140% net income increase at Zain Sudan and a 5% net income growth at Zain Kuwait
• Data revenue grew 3% to reach USD 1.66 billion representing 40% of consolidated revenue
• The first nine months saw Zain Group invest USD 316 million in CAPEX reflecting 8% of revenue, mainly in Fiber-to-the-Home (FTTH); spectrum fees; 4G upgrades and 5G rollouts
• Zain Jordan agreement with government includes extension of the current spectrum licenses for 10 years and a 25-year 5G license
• Combined, Tamam in Saudi Arabia, Zain Cash in Iraq and Jordan, and M-Gurush in South Sudan increase their customer base by 34% with annual revenue growth of over 231%
• Digital services groupwide witness revenue growth of 47% Y-o-Y, inclusive of the Dizlee (API) platform, which continues its trajectory growth, offering 51 live services and resulting in over 175 million API transactions since launch in mid-2018
• The evolution of Zain Esports continues through the August 2022 launch of PLAYHERA MENA, a JV between Zain Group, Zain KSA and PLAYHERA. To date, Zain Esports has held 25 major tournaments, with 30,000 participants and acquired over 50 million social media impressions
• Zain joins the UN Global Compact initiative, a leadership platform for the development, implementation, and disclosure of responsible business practices
• Zain ranked best employer, among top-10 companies to work for in region by Forbes
• ZainTech enters agreement to acquire BIOS Middle East, a regional cloud provider and receives two innovative awards from SAMENA Council-MEA Business Technology Achievement Awards.

Chairman of Zain Group, Ahmed Al Tahous said, “These strong financial results underscore the Board and management’s focus on ensuring that investments in new growth opportunities, network upgrades and environmental, social and governance practices enhance shareholder value. We firmly believe that by providing meaningful connectivity that fosters equitable systemic change, we are empowering and improving the socio-economic well-being of the communities, businesses and government bodies we serve.”

Zain Vice-Chairman and Group CEO, Bader Al-Kharafi commented, “This outstanding 9M operational performance is testament to the successful execution of our ‘4Sight’ growth strategy that has firmly strengthened the company’s financial position to fund future opportunities. Our focus on driving efficiencies, synergies and digital transformation across our operations, in tandem with investing in new business verticals and network upgrades, all rooted in sustainability and inclusivity at the core of everything we do, is paying off.”

“With the global economy witnessing socio-economic challenges on multiple fronts, Zain’s track record of resilience and agility to adapt to a vastly changing environment, has prepared us well to tap into the many lucrative opportunities that may arise.”

“As we drive the business forward seeking healthy cashflows, mainly through innovation in the consumer digital arena and the lucrative B2B space, our primary aims are to be the ICT partner of choice for governments and enterprises across the region and provide our individual customers an exceptional digital lifestyle experience.”

“Our portfolio optimization strategy is well on track following the successful sale of our passive tower infrastructure in Kuwait, Jordan and soon KSA, with Iraq next in the pipeline. In Jordan, following the granting of a 25-year 5G license, we expect to be live with 5G services in H2’ 2023, a significant milestone in the Kingdom’s rich telecom history, given the socio-economic boost this technology will give to the Jordanian community.”

“From a technology advancement point of view, another milestone was the deployment of our Nationwide Narrowband-IOT (Internet of Things) network in Kuwait and Bahrain, creating an exciting ecosystem for customers and enterprises.”

Al Kharafi concluded, “The adoption and successful implementation of comprehensive Sustainability and Diversity and Inclusion programs across our footprint have had an enormous positive impact on the work culture, and it was rewarding to be recognized in Forbes magazine global list as the best employer and top ten regionally for the second time.”

Operational review of key markets for the nine months ended 30 September 2022

 Iraq: Zain Iraq’s 9M 2022 revenue grew by 5% to reach USD 601 million and EBITDA grew by 6% to reach USD 241 million, reflecting EBITDA margin of 40%. Net income reached USD 10 million for 9M 2022. The operator’s customer base increased by 11%, now to serve 18.4 million customers maintaining its market leading position.