Zain announces half-year 2010 financial results
(N.B. The financial indicators for this period reflect the Revenues from the Middle East operations only. The Net Income includes the capital gain from the sale of Zain Africa assets as announced on June 8, 2010)
- Period highlighted by Middle East revenues of US$2.33 billion, a year on year increase of 10%
- Net Income soars 488% to US$3.085 billion (including capital gain of US$2.653 billion from the sale of Zain Africa)
- Number of served customers reaches 34.2 million, an increase of 28%
Kuwait, August 9, 2010
Zain today announces its consolidated financial results for the half-year, ending 30 June, 2010.
The results showed a healthy growth in several key performance indicators:
H1, 2010 Key Performance Indicators (in Kuwaiti Dinars & USD)
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Total Managed Active Customers
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34.2 million up 28% on H1, 2009
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Consolidated Revenues
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KWD 672.6 million (US$2.33 billion)
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EBITDA
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KWD 287.2 million (US$ 995 million)
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EBIT
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KWD 206.8 million (US$ 716 million)
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Net Income (including capital gain)
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KWD 895.3 million (US$ 3.085 billion)
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Earnings Per Share
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Fils 232 (US$0.80)
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For the first half of 2010, the Zain Group recorded consolidated revenues of KWD 672.6 million (US$ 2.33 billion), an increase of 10% compared to the same period of 2009. The company’s consolidated EBITDA reached KWD 287.2million (US$ 995 million) with EBIT reaching KWD 206.8 million (US$716 million). Net Income soars 488% to reach KWD 895.3 million (US$3.085 billion). This includes the capital gain of KWD 770.3 million (US$2.653 billion) from the sale of Zain Africa assets on June 8, 2010. The earnings per share reached 232 fils (US$0.80).
It is important to note that with the conclusion of the sale of Zain Africa on June 8, 2010, the company received cash proceeds of US$7.868 billion of which proportionate capital gain profit is reflected in the H1, 2010 Net Income results.
"Despite the challenging global economic conditions and the competitive markets in which we operate, we are extremely pleased with the 10% revenue increase which is in line with our expectations as well as the record profit that is the largest in the company’s history,” commented Mr Asaad Al Banwan, Chairman of the Board of Directors of Zain. “With the sale of the Zain Africa assets now concluded, coupled with a healthy cash balance and reduced debt levels, the company is now well positioned to focus on, and further grow, its profitable Middle East operations. Better things are yet to come as we diligently strive to maximise shareholders’ value in this new era.”
He further stated, “The H1 2010 Net Income (excluding the capital gain) and EBITDA results is all the more impressive when one takes into account that in the same period last year (H1-2009), where we had several reversals of provisions, including a favorable ruling resulting in an extraordinary net income gain of KWD 63 million (US$218 million) and EBITDA gain of KWD 44.8 million (US$ 155 million). This is an indication that EBITDA and Net Income growth for the first half of 2010 would have been much higher than stated, as without such provision reversals, the company would have had a respective growth of 7% in EBITDA and 41% in Net Income.”
Mr Al Banwan also revealed that the half year period witnessed an increase in total shareholders’ equity of approximately 16.6%, reaching US$ 8.9 billion, compared with US$ 7.7 billion at the end of the first half of 2009.
Also commenting on the results, Zain Group CEO Mr Nabeel Bin Salamah said: “The company has reengineering itself with a new and dynamic management team both at Group and in several country operations. We are focused on further increasing our market leadership in all our Middle East operations, offering customers the latest technologies and quality mobile services. We are now in the flexible position of being able to consider all our options.”
Mr Bin Salamah further added that the impressive performance of several key markets is an indication that better financial results are expected in the near future. “With our Saudi Arabia operation achieving breakeven EBITDA and 7 million customers in only 22 months of operation, coupled with the impressive customer and revenue growth in our Sudan and Iraq operations, and Kuwait maintaining its market share despite the entry of a third operator, we are confident these impressive results will continue.”
In recent years, Zain has invested heavily in network expansion in the region, especially in vast countries such as Iraq, Jordan, Saudi Arabia and Sudan, as well as technology upgrades in Bahrain and Kuwait. “These have all been translated into robust customer acquisition and healthy revenues,” said Bin Salamah. “We expect to reap further financial rewards of these strategic and capital intensive investments in the years ahead,” he concluded. Most recently in June 2010, Zain Jordan acquired a 15-year licence for US$70.4 million to establish and operate HSPA+ and LTE technology (3G) that is expected to be commercially launched in the first quarter of 2011.
ENDS
About Zain
Zain is a leading telecommunications operator across the Middle East providing mobile voice and data services to over 34.2 million active customers as at 30 June 2010 with a commercial presence in 8 countries. Zain operates in the following countries: Bahrain, Iraq, Jordan, Kuwait, Saudi Arabia and Sudan. In Lebanon, the company manages ‘mtc-touch’ on behalf of the government. In Morocco, Zain has a stake in Wana Telecom through a joint venture. Zain is listed on the Kuwait Stock Exchange (stock ticker: ZAIN) with a current market capitalization exceeding KWD 5.15 billion (US$18 billion) as at August 9, 2010.
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