Kuwait: Zain Group has generated $5.3billion revenues and a net profit of $605 million as per the Group”s consolidated financial results for the full-year 2020, and the fourth quarter ending on December 31 , 2020. The Group ended the year with a customer base of 47.8 million.
For the full-year 2020, Zain Group generated consolidated revenue of KD 1.63 billion (USD 5.3 billion), reflecting a 2% Year-on-Year (Y-o-Y) decrease, while consolidated EBITDA for the period declined by 8% Y-o-Y, to reach KD 673 million (USD 2.2 billion), reflecting a healthy EBITDA margin of 41%. Consolidated net income reached KD 185 million (USD 605 million), down 15% and reflecting Earnings per Share of 43 Fils (USD 0.14).
For the full-year, foreign currency translation impact, mainly due to the 16% currency devaluation in Sudan from an average of 45.6 to 54.4 (SDG / USD), cost the Group USD 110 million in Revenue, USD 50 million in EBITDA and USD 16 million in Net Income.
The Board of Directors of Zain Group recommended a cash dividend of 33 fils per share for 2020, adhering to the Group’s commitment made last year of a minimum 33 fils dividend for 3 years. This is subject to the Annual General Assembly and statutory approvals.
For the fourth quarter (Q4) of 2020, Zain Group generated consolidated revenue of KD 432 million (USD 1.4 billion), down 2% Y-o-Y. EBITDA for the quarter amounted to KD 172 million (USD 563 million), down 10% Y-o-Y, reflecting an EBITDA margin of 40%. Net income for the period amounted to KD 54 million (USD 176 million), down 16 % Y-o-Y, representing Earnings per Share of 13 fils (USD 0.04).
“The Group’s performance for 2020 reflects the reality of the COVID 19 pandemic’s disruption on economic-social activity and the unavoidable impact it had on the financial results. The Board and management are working closely together in minimizing this impact across our footprint with a particular focus on driving efficiencies, cost optimization and monetizing our 4G and 5G networks. Our 4Sight strategy is taking shape, building on our many strengths while seeking new value-creating business verticals that support our vision of becoming a leading ICT and digital lifestyle provider,” Ahmed Al Tahous, the Chairman of the Board of Directors of Zain Group, said.
“Since the start of the COVID 19 pandemic, the Group’s key focus has been on providing meaningful connectivity and implementing more digitalization initiatives to better serve communities, businesses and governments, aiming to lessen the impact of the pandemic on society. I would like to thank all the government ministries and regulatory authorities across our markets for their wisdom and understanding of the emerging industry dynamics, supporting us in overcoming challenges faced by the telecom sector during these unique times,” Bader Al-Kharafi, Zain Vice-Chairman and Group CEO, said.
“Last year, in a first by any corporate entity in Kuwait, the Board of Directors recommended a new cash dividend policy committing to a minimum 33 fils per share for three years. Despite the USD 417 million loss of revenue due to the impact of COVID-19 on the business and a foreign currency translation impact of USD 110 million on revenue, I am pleased to reaffirm the Board’s dividend commitment for 2020 will be fulfilled. This 33 fils per share dividend reflects a 77% payout ratio of earnings, one of the highest in the region.”
“The Board’s recommendation is a result of the operational performance attained by the Group in 2020, supported by our decisive efficiency drive that succeeded in reducing operational expenses by USD 168 million since the beginning of the pandemic. It also reflects the confidence in the future potential of our digital growth strategy in seeking new business verticals. Moreover, due to operational efficiencies, we managed to reduce the Group’s total net debt by approximately USD 1 billion, an achievement that has bolstered our financial position,” the Vice-Chairman added,
“We are focused on optimizing the synergies between the Group and all operations and investing heavily in 5G rollouts, FTTH, 4G expansion and spectrum whereby we invested USD 1.4 billion in CAPEX during 2020, representing 26% of revenue. Moreover, we are mobilizing resources to capitalize on the enormous opportunity that 5G technology and FTTH provides, creating vast opportunities particularly related to Enterprise (B2B) services to government and businesses of all sizes. The recent establishment of Zain Data Park will provide cloud hosting and managed services across the ICT stack, including applications, cyber security and networking.”
“Zain is also focused on reaping the lucrative opportunities in the digital space. Management is very optimistic of the potential of Zain KSA’s fintech subsidiary, ‘Tamam’, which was recently granted the region’s first consumer micro-financing license by the Saudi Central Bank. Innovation is key and investing in viable digital services such as the fintech sector is critical to Zain’s sustained evolution and success,” Al-Kharafi said.
“This initiative meets a number of different goals for Zain, including youth development, enriching the brand, fostering innovation and digital opportunities across our 4G, 5G and fiber networks. This initiative creates shareholder value on multiple fronts, and we are confident Zain esports will develop into a regional gaming powerhouse,” Al Kharafi, while commenting on the recent launch of Zain esports, said.
On a final operational note, Al Kharafi emphasized the success of Zain KSA’s recent capital restructuring in Q4 2020 that saw the remaining priority rights subscription oversubscribed by an unprecedented 469%, saying, “This transaction enhances Zain KSA’s ability to expand its strategic investments in the Kingdom’s telecommunications sector, growing its profitability and paving the way for dividends.”
“I would like to recognize and thank all the 7,500 dedicated and talented Zain colleagues across all our operations who have remained motivated to their duties and provided exemplary services, helping deliver on the critical role we play in maintaining connectivity and supporting the communities we serve throughout these exceptional times. Zain was committed to ensuring their wellbeing and safety, and the company took decisive actions to support and provide them with the tools needed to adapt and deliver during this time of crisis.”
“Moreover, I would like to express my deep, personal gratitude to our customers, the Board of Directors, and the government agencies and bodies we cooperate with to deliver the mobile experience we do at such a high level.”
Zain Bahrain generated revenue of USD 164 million, EBITDA for the year increased by 2%, to reach USD 57 million, reflecting an EBITDA margin of 34%. Net income amounted to USD 14 million, up 3% Y-o-Y. With the soft launch of 5G services mid-2020 and monetization initiatives, data revenue grew 7%, representing 51% of total revenue.
