The Zain Group Annual General Meeting (AGM) was held at Zain Group’s headquarters in Kuwait, attended by a quorum of 77% of shareholders. During the AGM, Zain Group’s 2023 annual report entitled “40 Years of Pioneering Innovation and Sustainable Growth” was presented, highlighting the financial statements, governance and auditors reports and the major achievements of Zain Group, its operations and subsidiaries across the Middle East and Africa for the previous year. Additionally, Zain Group released its 2023 Sustainability Report.
Attractive Dividends for Shareholders
The shareholders approved all items on the AGM agenda, including the recommended cash dividend of 25 fils per share. This dividend is slated for distribution to shareholders who are officially registered as of the company's record date on May 23, 2024. Cash dividends will be paid to shareholders from May 29, 2024.
The 25 fils dividend allocated for the second half of 2023 supplements the earlier distribution of a semi-annual dividend of 10 fils in 2023. In total, shareholders can expect to receive 35 fils per share for the entire year, showcasing a significant 70% payout ratio, which stands out as one of the highest in the region.
2023 Financial Performance
During the AGM, Zain Group presented its financial results for the full-year 2023, whereby the company served 50.6 million customers. For the full-year 2023, Zain Group generated consolidated revenue of KD 1.9 billion (USD 6.2 billion), a YoY increase of 10%. Consolidated EBITDA for the period increased by 5% YoY, to reach KD 705 million (USD 2.3 billion), reflecting an EBITDA margin of 37%. Consolidated net income reached KD 215 million (USD 701 million), marking a notable 10% year-on-year increase. This translates to earnings per share of 50 fils (or USD 0.16), showcasing the company's robust financial performance.
Zain Vice-Chairman and Group CEO, Bader Al-Kharafi stated, “2023 witnessed the ongoing implementation of our future-proof 4Sight strategy during our 40th year of pioneering innovation, which turned out to be a defining one for Zain, delivering strong performance, significant milestones, sustainable growth, and value to our customers and stakeholders.”
As per the Board of Directors' statement shared during the AGM, Zain operates within a dynamic landscape characterized by rigorous regulations, fierce competition, and swift changes. Despite facing hurdles such as geopolitical uncertainties in the region and navigating through challenging economic and social conditions in various markets, the company has made significant strides through its 4Sight strategy. This strategy has led to the establishment of new entities that add value and enhance operational efficiency. Consequently, the Group's operations experienced robust growth throughout 2023.
In addition to heavy investment in networks and technologies, Zain Group has entered multiple strategic partnerships with global and regional institutions to ensure that its transformational initiatives closely respond to market needs. These alliances have helped increase the value of Zain’s core business and have supported the focus on new lucrative growth opportunities in the digital sector and beyond, providing customers with a better telecommunications experience.
“The multiple digital transformational initiatives and expansion of new business verticals has driven business growth and positioned Zain firmly as a leading provider of innovative technologies and digital lifestyle communications, delivering meaningful connectivity that empowers societies,” continued Al-Kharafi.
Throughout 2023, the Group allocated strategic investments towards bolstering its 4G networks, expanding its 5G infrastructure, advancing fiber technology for home use, and enhancing digital platforms. These investments, amounting to 16% of revenues, played a pivotal role in enhancing customer retention and appealing to new customer segments. Notably, Zain now operates the largest 5G network in the region, provided in four markets: Kuwait, Saudi Arabia (KSA), Bahrain, and Jordan.
Also Read: Zain Kuwait: New Leadership to Build on Strong Foundations
Zain Group’s Brand Value Soars to USD 3 Billion
Apart from reporting strong operational and financial results for 2023, Zain Group was awarded numerous accolades, and saw its brand valuation increase 11% from USD 2.7 billion to USD 3 billion, according to a 2024 global valuation report.
The substantial increase in valuation following the initial launch of the Zain brand underscores the company's dedication to building its reputation and identity. This achievement reflects the success of its media campaigns as well as the implementation of corporate sustainability, diversity, equity, and inclusion initiatives over the years.
Network Investments Driving Digital Revenues
In 2023, Zain Group invested nearly USD 1 billion in network and technology, enhancing connectivity for communities. This drove an 8% growth in data revenues, totaling USD 2.4 billion, accounting for 39% of Zain Group’s consolidated revenues. The Group's digital services revenue witnessed a remarkable 9% growth, driven by data monetization initiatives that leverage its extensive network infrastructure.
The digital MVNO operators, Zain Saudi Arabia’s ‘Yaqoot’ and Zain Iraq’s ‘oodi’, continued to deliver healthy customer and revenue growth, offering a simple, all-digital mobile experience that alleviates customers from the traditional retail buying experience. Zain Jordan also launched 5G commercially in December 2023, becoming the fourth Zain operation to offer this exclusive high-speed and reliable service.
Fintech Innovation and Expansion
In 2023, Zain Group’s fintech customers surged by 40%, with revenue soaring by 195%, and total transaction volume tripling to USD 11 billion. TAMAM in Saudi Arabia and ZainCash in Iraq and Jordan have solidified their positions as market leaders for the unbanked and underbanked. In Kuwait, the acquisition of Bookeey aims to spearhead the development of innovative financial solutions and foster strategic partnerships with banks.
Partner of Choice for Governments and Enterprises
It was a momentous year for ZainTECH, Zain’s ICT solutions powerhouse, which has grown significantly, both organically and through acquisitions, since its launch in October 2021. The 20% annual growth in B2B revenues across the Group’s footprint reflects the synergistic business model between ZainTECH and the local operations’ B2B teams.
After successfully completing the strategic acquisition of BIOS Middle East, a prominent managed cloud service provider, ZainTECH proceeded to make two additional strategic acquisitions during the course of 2023: Adfolks and Specialized Technical Services Company (STS). By providing comprehensive ICT services, ZainTECH is paving the way to becoming the digital transformation partner of choice for governments and enterprises across the UAE and beyond.
Sale of Passive Tower Networks
To date, the tower sale and leaseback strategy across Kuwait, KSA, Iraq and Jordan has already unlocked over 17,000 towers with a total value of USD 1.3 billion and yielded a net gain of USD 415 million over the years.
In December 2023, Zain solidified its position as the regional leader in the tower arena with a pioneering agreement with Qatar’s Ooredoo Group and TASC Towers, which aims to incorporate nearly 30,000 towers across six countries, combining the service providers’ respective passive infrastructure portfolios. The tower deals serve to improve operational efficiencies and enable a concentrated effort on service provision. This strategic move ultimately translates into an enhanced mobile and data experience for customers, while also contributing to a reduction in the company’s carbon footprint.
Zain Omantel International
Zain Omantel International (ZOI) is an unprecedented joint venture that will revolutionize the international wholesale carrier sector. ZOI is creating synergies by optimizing the existing wholesale businesses of both companies by reducing operating costs and increasing competitiveness through access to state-of-the-art, low-latency and high-capacity services over its extended footprint.
Sustainability and DEI at the Core
Zain Group's corporate sustainability strategy is anchored on four pillars, which are Climate Change, Social Business, Inclusion, and Generation Youth. These pillars serve as the guiding principles for the company's five-year sustainability plan. In line with this strategy is the ground-breaking partnership between Zain KSA and Red Sea Global, which unveiled the world's first zero-carbon 5G network. Additionally, the company’s Diversity, Equity, and Inclusion (DEI) program continues to stand as a positive force within, boosting the company’s productivity and overall morale.
In conclusion, looking back on 40 years of value creation for shareholders and serving customers with pride, Zain Group’s commitment for 2024 and beyond is to continue executing its corporate strategy, enhancing efficiency and profitability in its core telecom business, and nurturing the growth of new ventures in ICT, digital infrastructure, fintech, and digital services.
