Zain Group 2022 revenue soars to $5.6bn, net profit up 6pc
KUWAIT CITY, March 14, 2023
Zain Group, a leading mobile telecom innovator in seven markets across the Middle East and Africa (MEA) region, has recorded solid results for FY 2022 with a 14% jump in its revenue which soared to KD1.7 billion ($5.6 billion) and a net profit of KD196 million ($640 million), up 6% over the previous year.
Announcing its consolidated financial results for the 12-month period ended December 31, 2022, Zain said the group ended the year with a customer base of 52.4 million, an annual increase of 7%, reflecting an addition of 3.5 million customers.
The group's digital services revenue soared 52% for the 12-month period, while its fintech customers grew 64% resulting in a revenue growth of over 241%.
Zain Group's consolidated ebitda for the period increased by 7% Y-o-Y, to reach KD673 million ($2.2 billion), reflecting an ebitda margin of 39%, while its EPS stood at 45 fils.
On its fourth quarter results, Zain said it had generated consolidated revenue of KD458 million ($1.5 billion), up 20% Y-o-Y. Ebitda for the quarter amounted to KD182 million ($591 million), up 22% Y-o-Y, reflecting an ebitda margin of 40%.
The Kuwaiti telco giant said its net income for the three-month period ended December 31, 2022 surged to KD44 million ($143 million), representing earnings per share of 10 fils ($0.03).
Highlighting its key operational achievements for Q4, Zain said it had invested $936 million in Capex reflecting 17% of revenue, mainly on 4G and 5G rollouts as well as expansion of fiber-to-the-home infrastructure and spectrum license fees.
Also it recorded a notable 7% customer growth hitting 3.5 million; and consolidated data revenue growth of 5% to reach $2.2 billion, representing 40% of the Group’s revenue for the year
During the three-month period, Zain Group's Saudi unit completed sale of 8,069 towers for $807 million to the Public Investment Fund and also transfered at least 3,000 towers in January this year. The group aims to transfer the remaining towers over the next 18 months.
Early this year, Zain Iraq had entered into a definitive 15-year agreement with TASC Towers to sell and leaseback, plus the management rights of its 4,968 tower portfolio for $180 million.
Also Zain fintech across the group attracted 1 million customers, thus registering a 64% Y-o-Y increase, with revenue up 241% Y-o-Y netting transactions value of $3.6 billion in 2022.
On the solid performance, Group Chairman Ahmed Al Tahous said: "It was a challenging year where the board and management focused on operational efficiency, ESG initiatives, and the development of lucrative business verticals to drive shareholder value among many other key initiatives."
Impressed with the results, the Zain's board of directors has recommended a cash dividend of 25 fils per share for the second half (H2) of 2022. This dividend follows the semi-annual dividend of 10 fils distributed earlier in 2022, totaling 35 fils per share for the year and reflecting a 78% payout ratio, one of the highest of listed entities in the region.
Furthermore, the board has made another recommendation to implement a minimum semi-annual and annual cash dividend policy of 35 fils in total, for the next three years. However, both these recommendations are subject to Annual General Assembly and statutory approvals.
According to Zain, the total recommended cash dividends of 25 fils for H2, 2022 and 35 fils each year for the next three years, will total 130 fils in cash dividends.
This expected distribution based on the current share price of Zain as of March 13, 2023, will reflect an average annual yield of approximately 8% for entitled shareholders for the three-year period.
Vice-Chairman and Group CEO Bader Al Kharafi said: "The impressive results for Q4 and FY 2022 are a culmination of many cost optimization, digital innovation, and data monetization initiatives executed, bolstered by 5G network upgrades, lucrative enterprise deals, tower sales, proactive regulatory and sustainability practices implemented across our footprint in accordance with our 4Sight strategy, all of which are combining to future-proof the company."
"The improved dividends, along with the board’s minimum 35 fils recommendation for the forthcoming three years, provides a clear indication of the strong operational performance and strength of our financial solvency as we methodically grow the business and manage the continuing socio-economic challenges that several of our markets present," he stated.
"Similar to previous completed transactions in Kuwait and Jordan, the recent sale and leaseback of our passive tower infrastructure in Saudi Arabia and Iraq for a combined value of $1 billion, creates significant value for shareholders. By injecting the sale proceeds into the business, it gives both operations greater flexibility to invest in network upgrades and ICT technologies to meet the ever-increasing demand for reliable and high-speed broadband," he noted.
"Moreover, the deal enhances operational efficiencies and enables a laser focus on offering new services and providing customers a better mobile and data experience," he stated.
"The impressive growth of several digital entities that were recently launched is a key part of the Zain’s financial performance and brand strength in recent years. One million customers are now benefiting from the numerous dynamic fintech solutions across several operations, recording over USD 3.6 billion worth of transactions in 2022. We will nurture this ever-growing demand and plan to extend much needed fintech offerings across all operations in the near future," he added.-TradeArabia News Service
