Zain Group reports 2% net profit growth for 2017

09/02/2018 05:06 AST

Zain Group, a leading mobile telecom innovator in eight markets across the Middle East and Africa, announces its consolidated financial results for the full-year 2017, and fourth-quarter ended Dec 31, 2017. Zain now serves 46.6 million customers, reflecting a 1% decrease year-on-year (Y-o-Y).

For the full-year 2017, Zain Group generated consolidated revenues of KD 1.03 billion (USD 3.4 billion), down 5% Y-o-Y, while consolidated EBITDA for the period decreased by 19% Y-o-Y to reach KD 414 million ($1.37 billion), reflecting an EBITDA margin of 40%. Consolidated net income reached KD 160 million ($527 million), up 2% and reflecting Earnings Per Share of 39 fils ($0.13).

For 2017, foreign currency translation impact, predominantly due to the 53% currency devaluation in Sudan from an average of 8.0 to 16.9 (SDG/USD), cost the company $494 million in revenue, $213 million in EBITDA and $82 million in net income. Excluding the above-mentioned currency translation impact, Y-o-Y revenues would have grown by 8% and net income growth would be 17%.

The Board of Directors of Zain Group recommended a cash dividend of 35 fils per share subject to the Annual General Assembly and regulatory approvals. Despite financial challenges, this dividend comes on the back of the sale of 425,711,648 treasury shares, which will result in a 11% increase of the total value distributed for 2016 from KD 136.5 million to KD 151.4 million for 2017.

For the fourth quarter of 2017, Zain Group recorded consolidated revenues of KD 262 million ($868 million), a similar level to the same period in 2016. EBITDA for the quarter reached KD 98 million ($326 million), reflecting an EBITDA margin of 38%. Net income for the period reached KD 37 million ($124 million), reflecting a 16% increase, and representing Earnings Per Share of 9 fils ($0.03).

Specifically, for the fourth quarter of 2017, currency translation impact cost the company $54 million in revenue, $20 million in EBITDA and $6 million in net income, again predominantly due to Sudan currency devaluation from 12.8 to 18.3 (SDG/USD), a 30% decrease.

Key Operational Notes for 12 months ended Dec 31, 2017:

Group data revenues (excluding SMS and VAS) increased by 3% during 2017, representing 25% of the Group's consolidated revenues

The currency devaluation impact in Sudan affected both Zain Group's full-year and Q4 2017 financial results as highlighted above.

Other notable highlights for 2017 include the SAR 1 billion ($264 million) net income turnaround witnessed by Zain Saudi Arabia; robust customer growth of 16% and return to profitability in Zain Iraq; as well as Sudan continuing to perform exceptionally well in local currency terms.

Commenting on the results, the Chairman of the Board of Directors of Zain Group, Mohannad Al-Kharafi said, "The company's performance during 2017 and especially the last quarter of the year is very pleasing given the various operational, regulatory, social and forex challenges we face across our footprint. It is our focus to maintain market leadership and grow the business further by exerting all our efforts on innovation, and customer service, while at the same driving efficiencies which allow us to consistently deliver strong operational results. The Board is working closely with management to evaluate value-creating opportunities in the ICT sector, while ensuring all strategic partnerships and investments are geared towards maximizing shareholder value."

Zain Vice-Chairman and Group CEO, Bader Al-Kharafi said, "The ongoing implementation of our digital lifestyle strategy combined with substantial investment in network technology upgrades and cost optimization initiatives is proving successful as we recorded growth in several key financial metrics across many of our key markets for the full-year and fourth-quarter of 2017. One main factor outside

Arab Times