Zain announces healthy H1, 2011 financial results as net income increases 17%
· Period highlighted by year-on-year 17% net income increase to US$ 507 million with 2% increase in revenues to reach US$ 2.381 billion
· Group added 5.4 million customers over the past 12 months, reflecting a 16% increase to be serving 39.6 million active customers
Kuwait, July 31, 2011
Zain announces today its consolidated financial results for the half year ended 30 June, 2011.
The results showed healthy growth in several key performance indicators. It’s important to note that the below mentioned net profit and percentage growth result excludes and does not take into account the capital gain from the sale of the Zain Africa assets that was concluded on June 8, 2010.
H1, 2011 Key Performance Indicators
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Total Managed Active Customers
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39.6 million up 16% on H1, 2010
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Consolidated Revenues
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KWD 659.4 million (US$ 2.381 billion)
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EBITDA
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KWD 293.1 million (US$ 1.058 billion)
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EBITDA Margin
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44% (up 1 percentage point)
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EBIT
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KWD 210 million (US$ 758.3 million)
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Net Income
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KWD 140.2 million (US$ 506.5 million)
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EPS
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KWD 0.036 (US$ 0.13)
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For the first half of 2011, the Zain Group recorded consolidated revenues of KWD 659.4 million (US$ 2.381 billion), reflecting a positive 2% increase on the same period in H1-2010. The period witnessed net income increasing to KWD 140.2 million (US$ 506.5 million), an impressive 17% increase on the same period in H1-2010. The company’s consolidated EBITDA reached KWD 293.1 million (US$ 1.058 billion) up 6% on H1-2010, reflecting an EBITDA Margin of 44% (up one percentage point) with EBIT of KWD 210 million (US$758.3 million), a 6% increase on H1-2010. The earnings per share reached 36 fils (US$0.13).
Year-on-year customer growth across all operations in which Zain operates was 16%, whereby the company was serving 39.6 million managed active customers as of June 30, 2011. Zain Group added 5.4 million new active customers over the past twelve months with growth predominantly coming from Saudi Arabia which witnessed 32% growth to serve 9.1 million customers and Sudan with 24% growth serving 11.4 million. Zain Kuwait also increased its customer base by 7% reaching a milestone 2 million customers, along with increases in Jordan 5.5% and Iraq 5.2% to each be serving 2.7 million and 12.3 million customers respectively.
Q2, 2011 Operational Highlights:
· Company received remaining $700 million from sale of Africa assets to Bharti Airtel
· Zain Saudi Arabia successfully refinances $600 million Murabaha loan with syndicate of regional banks to fund future growth of mobile operation
· Notable growth in Zain Sudan which now serves 11.4m customers (up 24%) and attaining a 14% revenue increase in local SDG currency
· Zain Iraq now serves 12.3 million customers (up 5%) with a healthy 10% increase in revenues
· Zain Group’s E-mal mobile financial services platform launched in Jordan wins prestigious Global Telecoms Business Innovation Award
· Zain Group signs landmark deal with Apple and launches iPhone 4 in Kuwait, Jordan and Bahrain
Remarks from the Chairman and CEO:
Commenting on the results, the Chairman of the Board of Directors of Zain, Mr Asaad Al Banwan said, “Despite intense competition across all our operations, the continual growth in all key financial indicators justify the many prudent decisions recently adopted by the Board and the executive management. The company has reengineered itself on many levels, focusing on maximising shareholders’ value and providing customers a wonderful mobile experience.”
Mr Al Banwan also noted that, “although consolidated revenues increased a moderate 2%, it is very gratifying that the company attained an impressive 17% net income growth and EBIT and EBITDA growth of both 6% respectively, all indicative of the successful operational efficiency drive implemented by the company. These results are all the more impressive when one considers that the net profit for the half year was adversely affected by currency fluctuations of an amount of US$ 75 million.”
Zain Group CEO Mr Nabeel Bin Salamah said: “The impressive 16% customer growth (5.4 million new customers) over the past 12 months is a reflection and reward of our extensive investments in network technology upgrades and new appealing product offerings across all our country operations. With a healthy cash balance and reduced debt levels, coupled with an optimal efficiency drive on many levels, the company is well-positioned to continue investing in and grow its profitable operations.”
Mr Bin Salamah pointed out Zain is the market leader by customers in five of its seven operations, noting the exceptional customer growth performance in Saudi Arabia and Sudan and the 2 million customer milestone in Kuwait, the mothership operation that witnessed an impressive 7% increase, despite the competitive landscape.
On Iraq that is Zain’s largest mobile operation by customer numbers, Mr Bin Salamah said that the company is continually rolling out its network expansion across the country especially in the northern Kurdistan area where customer acquisition has met initial targets. He also noted that the operation was in the final stages of concluding an outsourcing optimization agreement with a world leading technology provider to manage and optimize its mobile network that will have numerous benefits for customers who can expect more product and efficient service offerings.
On South Sudan, Mr Bin Salamah said the company was committed to supporting the economic development of the newly born nation. “We are confident that the company’s vast investment into South Sudan will be rewarding. The company is expanding its 3G voice and data services and heavily investing in fibre and the core network to meet the expected triple digit customer growth in the coming years.”
ENDS
About Zain
Zain is a leading telecommunications operator across the Middle East providing mobile voice and data services to over 39.6 million active customers as of 30 June 2011. With a commercial presence in 7 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 15.5% stake in Wana Telecom, now branded ‘INWI’, through a joint venture. Zain is listed on the Kuwait Stock Exchange (stock ticker: ZAIN). For more, please email info@zain.com or visit:
Zain Channel