Zain Group Net Profit Soars to USD 170 Million in Q2 2024

Zain served 47.8 million customers by the end Q2 2024, a 13% increase from Q1 2024, as 5 million customers returned to the network, following the network stabilization efforts carried out in Sudan. 

Group Key Performance Indicators (KWD and USD) Q2 2024

In Q2 2024, Zain Group generated consolidated revenue of KWD 479 million (USD 1.6 billion), up 4% compared to Q2 2023. Normalized EBITDA grew 13% YoY to reach KWD 178 million (USD 579 million), reflecting an EBITDA margin of 37%. Normalized net income growth soared 55% to reach KWD 52 million (USD 170 million) reflecting an earnings per share of 12 fils.

Group Key Performance Indicators (KWD and USD) H1 2024

For H1 2024, Zain Group generated consolidated revenue of KWD 945 million (USD 3.1 billion). Normalized EBITDA grew 1% YoY to reach KWD 325 million (USD 1.1 billion), reflecting an EBITDA margin of 34%. Normalized net income growth for the first six months increased by 11% reaching KWD 81 million (USD 265 million), reflecting an earnings per share of 19 fils (USD 0.06).

FY 2023 Coverage: Zain Group’s FY23: Momentous Year With Strong Operational, Financial Performance

Key Operational Notes for Q2 and H1 2024

The Board declared an interim dividend of 10 fils per share for the fourth consecutive year, payable on October 6, 2024. Zain KSA announced a cash dividend of SAR 449 million (USD 120m), with Zain Group receiving USD 44m. Q2 2024 net profit was impacted by a Kuwait number range claim in Q2 2023 and included a USD 20 million impairment of network assets in Sudan.

Notably, the currency devaluation in Sudan negatively affected H1 2024 financial KPIs, with the currency devaluing from SDG 596 per USD to SDG 1,799 per USD by June 2024. However, H1 2024 data revenue grew 1% YoY to USD 1.2 billion, representing 39% of Group revenue. Zain Group invested USD 159 million in CapEx.

Operations in Kuwait, KSA, Bahrain, and Jordan showed impressive 5G revenue growth, while fintech services saw a 24% YoY revenue increase, with transaction value up 56%. Enterprise revenue rose 9%, bolstered by deals and the integration of the STS acquisition. Digital operators—Yaqoot in KSA and Oodi in Iraq—reported customer growth of 8% and 37%, respectively. Digital services, including the Dizlee API platform, expanded with new gaming and streaming services.

Furthermore, Zain won several awards for corporate governance, SDG leadership, and women's empowerment, and published its 13th annual sustainability report, "A Pathway to Value Creation."

Commenting on Q2 and H1 2024 results, Osamah Othman Al Furaih, Chairman of the Board of Directors of Zain Group said, “The Board is pleased with the sound financial and operational performance of the company given the exceptional socio-economic and currency challenges that management is having to contend with, particularly in Sudan. We remain resolute in our focus to implement effective environmental, social, and governance (ESG) practices, further seeking and developing multiple new lucrative business verticals, and preparing the company for the next phase of sustainable growth in driving shareholder value.”

Meanwhile, Bader Nasser Al-Kharafi, Zain Vice-Chairman and Group CEO, commented, “We are seeing areas of positivity in Sudan where the persistent turnaround efforts of the team there saw 5 million customers recently return to the network, a remarkable achievement given the exceptional circumstances. Our mitigation efforts that focus on network service availability and customer initiatives are paying off.”

H1 2024 Results: Zain KSA’s H1 2024 Results: SAR 5 Billion Revenue, 60% Net Profit Growth

A Message from the Board of Directors on the Passing of Eng. Sultan Al-Deghaither, Zain KSA CEO

It is with great sadness that the Board of Directors of Zain Group extends its sincere condolences and sympathy on the passing of our dear colleague and brother, Eng. Sultan bin Abdulaziz Al-Deghaither, Zain KSA CEO. May God bless his soul and give his loved ones and the entire Zain family strength in overcoming this sudden grief.

He will forever hold a place in all our hearts, and we wholeheartedly acknowledge his remarkable achievements and invaluable contribution to Zain KSA over the years, where he rose from being one of the first employees of the operator to become its CEO, taking the operation and its people to new heights.

His many achievements include implementing a strategic transformation plan that turned around the company into achieving historical levels of profitability and paying dividends. Moreover, he placed Zain KSA and the Kingdom on the global 5G map with the launch of the third-largest 5G network in the world and the largest in the Middle East, pushing boundaries and offering the Kingdom’s community state-of-the-art high-speed connectivity accompanied by dynamic digital solutions and services.

Also Read: Zain Group Outlines its ‘Ten-Year Journey’

Financial KPIs of Key Markets (3-Month and 6-Month Period Ending 30 June 2024)

Kuwait: Zain Group's flagship operation maintained its market leadership, with its customer base increasing by 1% to reach 2.7 million. Noted as the Group’s most profitable operation, revenue for the quarter grew 9% to reach KWD 93 million (USD 303 million) and normalized EBITDA grew 11% to reach KWD 37 million (USD 122 million), reflecting an EBITDA margin of 40%. Normalized net income grew 17% YoY to reach KWD 24 million (USD 78 million).

Despite the intense competition, the operator continues to expand and grow its leading nationwide 5G network, capturing the largest 5G customer base and revenue market share in the country. Normalized EBITDA and net income ‘growth’ for Q2 2024 was reached by adjusting the number range claim in Q2 2023 (KWD 24.68 million).

Saudi Arabia: Revenue for the quarter grew by 7% YoY to reach USD 680 million, while EBITDA reached USD 208 million, reflecting an EBITDA margin of 31%. Net income for the quarter reached USD 28 million. The operator’s 5G network (covering over 66 cities) saw data revenue represent 40% of total revenue and customers served stood at 9 million.

Iraq: Revenue for the quarter jumped 13% YoY to reach USD 263 million, EBITDA grew by 28% reaching USD 115 million, reflecting an EBITDA margin of 44%. Net profit soared by 196% to reach USD 39 million. H1-2024 data revenue grew 29% representing 38% of total revenue. The operator’s customer base reached 19 million customers, maintaining its market leading position.

Sudan: In Q2 2024, revenue increased by 41% compared to Q1 2024, reaching USD 71 million. EBITDA grew significantly by 195% to USD 34 million, with an EBITDA margin of 49%. Net income for the quarter rose by 51% compared to Q1 2024, reaching USD 33 million. The customer base grew by 92% to 10 million, up from 5.2 million last quarter due to a robust recovery plan and the addition of a new data center in Port Sudan.

Due to the rapidly developing situation in Sudan, Q2 2024 performance has been compared with Q1 2024, as any comparison with Q2 2023 would distort the results due to the rapidly evolving conditions in Sudan, coupled with the effects of the significant currency devaluation in Sudan.

Jordan: Q2 2024 revenue grew 4% to reach USD 137 million, EBITDA grew by 3% and reached USD 56 million, reflecting an EBITDA margin of 41%, while net income for the period reached USD 17 million. With the ongoing expansion of 5G, FTTH and 4G services across the country, H1 2024 data revenue grew 7%, representing 51% of total revenue. Zain Jordan served 4 million customers, up by 5%, thus, maintaining its market leadership.

Bahrain: Revenue for the quarter remained stable at USD 50 million. While EBITDA grew 12% QoQ to reach USD 16 million, reflecting an EBITDA margin of 32%. Net income increased 3% to reach USD 3.6 million, with H1 2024 data revenue growing by 6% to represent 46% of total revenue.

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