KUWAIT: Zain Group, a leading mobile telecom innovator in eight markets across the Middle East and Africa, announces its consolidated financial results for the year 2015 & fourth quarter ended 31 December, 2015. Zain served 45.6 million customers at the end of the period, reflecting a 3% increase year-on-year (Y-o-Y). For the full-year 2015, Zain Group generated consolidated revenues of KD 1.14 billion (USD 3.78 billion), down 6% year-on-year (Y-o-Y), while consolidated EBITDA for the period reached KD 499 million (USD 1.66 billion), relatively stable Y-o-Y, reflecting a healthy EBITDA margin of 44%. Consolidated net income reached KD 154 million (USD 513 million), down 21% reflecting Earnings Per Share of 40 Fils (USD 0.13).
The Board of Directors of Zain Group recommended a cash dividend of 30 Fils (USD 0.10) per share subject to the Annual General Assembly and regulatory approvals. Additionally, shareholders’ equity stood at KD 1.54 billion (USD 5.09 billion) as at 31 December, 2015. For the fourth quarter of 2015, Zain Group recorded consolidated revenues of KD 283 million (USD 933 million), a decline of 3% on the same period of the previous year (Q-o-Q). EBITDA for the quarter reached KD 127 million (USD 418 million), up 7% Q-o-Q, reflecting a healthy EBITDA margin of 45%. Net income for the quarter reached KD 36 million (USD 119 million), up 8% Q-o-Q, reflecting Earnings Per Share of 9 Fils (USD 0.03).
Key Operational Notes for 12 months ended 31 December 2015:
- Substantial investments in 3G and 4G LTE network expansion and upgrades continue to pay off as Group data revenues (excluding SMS and VAS) surged by an impressive 15% during 2015, representing 20% of the Group’s consolidated revenues.
- Foreign currency translation impact mainly due to the appreciation of the USD against the KD cost the company USD 218 million on revenue, USD 95 million on EBITDA and USD 30 million on net income for the year 2015.
- Specifically for the fourth quarter of 2015, currency translation impact cost the company USD 41 million on revenue, USD 18 million on EBITDA and USD 5 million in net income.
- The continued political instability in Iraq during 2015 has seen several million people displaced internally with Zain Iraq enduring frequent temporary network interruptions and associated higher network operational costs. These unavoidable occurrences coupled with heightened levels of price competition and implementation of a new 20% sales tax on mobile services as well as wide-ranging tax increases on other sectors in Iraq that hit spending on mobile services, all contributed to a negative impact on Zain Iraq’s and consequently Zain Group’s overall key financial metrics (24% decline in revenues recorded at Zain Iraq and a 52% decline in net income at the operation).
- Bahrain, Jordan, Saudi Arabia and Sudan operations all reflect robust growth for the year, with Zain Kuwait’s performance impacted by intense price competition despite customer growth.
- Heavy investment in 3G & 4G network expansion upgrades across operations saw CAPEX spend for the year amount to USD 797 million (excluding Saudi Arabia), reflecting 21% of Group revenues.
- Additional amortization on both Zain Iraq’s 3G license fee and Zain Jordan’s additional 3G and newly acquired 4G spectrum license fees impacted the bottom line by USD 52 million.
Commenting on the results, the Chairman of the Board of Directors of Zain Group, Asaad Al Banwan said, “The Board is working closely with the executive management to overcome the many challenging socio-economic factors in a number of our markets, particularly with regard to the social unrest in Iraq and the intense price competition in Kuwait. The positive performances in Bahrain, Jordan, Saudi Arabia and Sudan underline that the company’s strategy is fundamentally sound in driving the business forward and we shall continue managing the highly changeable environments we face in a pragmatic and effective manner.”
