Zain Group’s Profits Reach 616 million in 2021

Zain Group, a leading telecom innovator in seven markets across the Middle East and Africa, announces its consolidated financial results for the full-year 2021, and fourth quarter ended 31 December, 2021. The Group ended the year with a customer base of 48.9 million, an annual increase of 2.4%, reflecting an addition of 1.2 million customers.

For the full-year 2021, Zain Group generated consolidated revenue of KD 1.5 billion (USD 5 billion), a year-on-year (Y-o-Y) decrease of 5%. Consolidated EBITDA for the period declined by 5% Y-o-Y, to reach KD 628 million (USD 2.1 billion), reflecting an EBITDA margin of 41%. Consolidated net income reached KD 186 million (USD 616 million), up 2% Y-o-Y and reflecting earnings per share of 43 Fils (USD 0.14).

For the full-year 2021, currency devaluations in Sudan from 55 in January 2021 to 436 (SDG/USD) end of December 2021; in South Sudan from 175 in January 2021 to 426 (SSP/USD); and a 19% currency devaluation in Iraq from 1,190 to 1,470 (IQD/USD) resulted in a foreign currency translation impact of USD 962 million in revenue and USD 479 million in EBITDA.

Note, if the USD 962 million currency translation impact on revenue was excluded, YoY revenue would have grown by 13% to reach USD 6 billion, and EBITDA by 17% for 2021.

The Board of Directors of Zain recommended a cash dividend of 23 fils per share for the second half of 2021, subject to Annual General Assembly and statutory approvals. This dividend follows the semi-annual dividend of 10 fils distributed earlier in 2021, totaling 33 fils per share for the year.

For the fourth quarter (Q4) of 2021, Zain Group generated consolidated revenue of KD 382 million (USD 1.3 billion), down 11% Y-o-Y. EBITDA for the quarter amounted to KD 150 million (USD 496 million), down 12% Y-o-Y, reflecting an EBITDA margin of 39%. Net income for the period amounted to KD 50 million (USD 167 million), down 5 % Y-o-Y, representing earnings per share of 12 fils (USD 0.04).

“The board and management’s focus on operational efficiency, significant investment in network upgrades, and meticulous execution of key elements of our sustainability-conscious 4Sight strategy continues to drive shareholder value. I would like to thank all the government bodies and regulatory authorities across our markets for their support and wisdom in creating an environment to raise the telecom sector to new heights and empower Zain to enhance the meaningful connectivity we provide the communities, businesses and governments we serve.”

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

“The Group’s solid performance for 2021 reflects the success of the many operational and monetization initiatives implemented by the management across all markets. The board’s recommendation of 23 fils per share dividend for H2 in addition to the semi-annual 10 fils dividend, totaling 33 fils for the year, reflects a 77% payout ratio, one of the highest in the region. This provides a clear indication of the strength of our financial solvency, and the company’s ability to execute on its strategic profitable growth plans, despite the continuing challenges of the pandemic and impact of unavoidable currency devaluations on the business.

We continue to manage significant currency devaluations in Iraq and Sudan, which impacted key financial indicators during 2021, costing the company USD 962 million in revenue and USD 479 million in EBITDA. To mitigate this impact, we have revamped prices and focused on monetizing new digital services while seeking lucrative opportunities in the enterprise space to capitalize on 4G rollouts in these countries.

Despite the Sudan currency impact, we are very pleased that for the first time since 2007, the Zain Sudan board decided to distribute SDG15 billion ($30m) of dividends to Zain Group, representing 45% of the operators 2021 net income. We thank the Central Bank of Sudan and regulatory authorities for their support on this milestone.

In Kuwait, Saudi Arabia and Bahrain we are focused on monetizing our significant investments in 5G networks and international connectivity across all operations through our revamped wholesale business, seeking lucrative opportunities in the enterprise and government space. Across all operations, we invested USD 1.1 billion during 2021 in network upgrades and digital infrastructure to enhance the mobile experience and drive growth.

Similar to the deal in Kuwait, the sale of our passive tower infrastructure in Jordan for USD 88 million creates significant value for shareholders. It gives Zain Jordan greater flexibility to invest in network upgrades and ICT technologies to meet the ever-increasing demand for reliable broadband access. It also enhances operational efficiencies and enables a laser focus on customers, allowing us to offer them the best mobile and data experience in the Kingdom.

It is extremely pleasing to record impressive growth in all key indicators in various digital entities we have launched in recent years. Our fintech aspirations of creating the first telco-led challenger bank in the region are energized by the customer uptake and transaction growth we have experienced with ‘Tamam’ in Saudi Arabia, ‘ZainCash’ platforms in Jordan and Iraq, and ‘M-Gurush’ in South Sudan.

The API platform continues its positive trajectory of profitable growth on multiple levels, and Zain Esports is proving itself as a leading regional gaming powerhouse. Zain Saudi Arabia’s digital operator ‘Yaqoot’ continues to deliver healthy growth in the digital telco space, as does Zain Iraq’s digital operator, ‘oodi’, and together the operations offer a simple, all-digital mobile experience that frees customers from the traditional retail buying experience.

The A- ranking that Zain achieved in the latest ‘CDP Score Report–Climate Change 2021’, positioned us first in the region and among leaders globally, highlighting our mission to foster sustainable systemic change and provide meaningful connectivity by integrating technologies to generate safe energy to help reduce global warming. Zain is committed to implementing programs that make us a more efficient and environmentally friendly organization.

I would like to recognize and thank over 7,200 dedicated and talented Zain colleagues across our operations who despite the pandemic, continue to provide exemplary services to our customers. We enter 2022 with confidence, as well continue to deliver on the 4Sight growth strategy and take advantage of evolving opportunities within the core telecom business while diversifying into new lucrative business verticals in the ICT, digital infrastructure, fintech and digital services arena.”

Bader Al-Kharafi, Vice-Chairman and Group CEO, Zain