(N.B. The financial indicators for this period reflect the Revenues from the Middle East operations only. The Net Income includes the capital gain from the sale of Zain Africa assets, as announced on June 8, 2010)
· Period highlighted by solid growth in Consolidated Revenues to reach US$4.72 billion (KWD 1.35 billion), a year-on-year increase of 7%
· Net Income soars 445% to total US$3.675 billion (KWD 1.063 billion) made up of US$2.653 billion (KWD770.3m) capital gain from sale of Africa Assets and US$1.022bn (KWD 293m) for the operational year
· Board of Directors recommend cash dividend of US$0.72 (200 fils) per share
· Customer base increases 23% to reach 37.24 million
· Shareholder equity increases 11% to US$9.77 billion (KWD 2.75 billion)
· Management reveals new 2014 organic growth business aspirations
Kuwait, March 3, 2011
Zain today announces its Group consolidated financial results for the twelve months ending 31 December 2010. The results showed an impressive growth in several key performance indicators, with a consolidated net profit of $3.675 billion, the highest ever in Zain’s history and a record in the private sector of Kuwait.
Twelve months 2010 Key Performance Indicators (Kuwaiti Dinars & USD)
| Total Managed Active Customers | 37.2 million up 23% on Dec 2009 |
| Consolidated Revenues | KWD 1.35 Billion (US$ 4.72 billion) |
| EBITDA (margin 46%) | KWD 616 million (US$ 2.15 billion) |
| EBIT | KWD 449 million (US$ 1.57 billion) |
| Net Income (including capital gain) | KWD 1.063 billion (US$ 3.675 billion) |
| Net Income (excluding capital gain) | KWD 293 million (US$1.022 billion) |
| Earnings Per Share | Fils 275 (US$0.95) |
For the 12 months of 2010, Zain Group recorded impressive consolidated revenues of KWD 1.35 billion (US$ 4.72 billion), an increase of 7 % compared to the 12 months of 2009. The company’s consolidated EBITDA increased by 6% for the same period to reach KWD 616 million (US$ 2.15 billion) reflecting an EBITDA margin of 46%, with EBIT rising 4% to reach KWD 449 million (US$1.57 billion).
Consolidated Net Income reached KWD 1.063 billion (US$3.675 billion), an increase of 445%, that is inclusive of the capital gain of KWD 770.3 million (US$ 2.653 billion) from the sale of Zain Africa assets on June 8, 2010. If the capital gain from the Africa Assets sale is not taken in account, net income reached KWD 293 million (US$1.022 billion) for the year, representing a notable 50% increase on 2009 net income of KWD 195 million (US $675 million).
The earnings per share for the 12 months of 2010, stood at KWD 0.275 (US$ 0.95), compared to KWD0.051 (US$0.18) in the previous year. Additionally, the period witnessed shareholder equity increase 11% to reach US$9.77 billion (KWD 2.75 billion).
With such impressive earnings, the Board of Directors have recommended a cash dividend of 200 fils per share (US$0.72) that is subject to the necessary approvals at the Annual General Assembly that will be held in the very near future.
Year-on-year customer growth across all the Middle East countries in which Zain operates was 23%, whereby the company is serving 37.24 million managed active customers as of December 31, 2010. Zain Group added seven million new active customers over the past twelve months as per below table.
| Country | Active Customers | Growth (%) |
| | 2010 (000s) | 2009 (000s) | |
| Bahrain | 500 | 662 | (24%) |
| Iraq | 12,074 | 10,296 | 17% |
| Jordan | 2,488 | 2,493 | 0% |
| Kuwait | 1,870 | 1,838 | 2% |
| Lebanon | 1,499 | 1,313 | 14% |
| KSA | 8,393 | 5,232 | 60% |
| Sudan | 10,416 | 8,493 | 23% |
| Total | 37,239 | 30,327 | 23% |
Mr Asaad Al-Banwan, Chairman of the Board of Directors of Zain commented, “2010 was both a crucial and record year for the company as it represented a turning point in the Group’s operational and strategic plans. It witnessed a series of decisions that led to the sale of the Group’s 15 African mobile operations, reaping the fruits of the Group’s investments on the continent and accomplishing the desired results of Zain’s successful expansion strategy embarked on back in 2003.”
He further added, “This decision of divesting the African assets has helped the Group settle its financial obligations and invest a large part of the financial gains in its main and cash generative Middle East markets where the focus will be going forward. It also highlights the significant value and wealth creation that has been provided to shareholders by the Group actions. Our priority is first and foremost the interests of shareholders when making any decision.”
On his part, Zain Group CEO Mr Nabeel Bin Salamah noted “Zain is the largest operator in the region with over 37 million customers and a market leader by customers in five of its seven Middle East operations. With a healthy cash balance and reduced debt levels, the company is now well-positioned to focus on, further invest in and grow its profitable Middle East operations. We will strive to increase our market leadership by offering customers the latest technologies and quality mobile services, ensuring a wonderful mobile experience.”
Mr Bin Salamah also commented that during the past two years the Group has invested more than US$1.4 billion to develop and improve the operational efficiency and quality of its network across all its Middle East operations. “This will provide a strong base for future growth so that Zain can be at the forefront of mobile technology in most of the markets it serves where,” he said.
Additionally Mr Bin Salamah stated that the company has reengineered itself and implemented a range of initiatives over the past year at both Group and country levels to increase operational efficiency and increase margins on many key indicators.
Furthermore, Mr Bin Salamah revealed the company’s new 2014 aspirations through organic growth: “To realize our business aspirations, we have devised an integrated strategy that will hopefully aid us, through organic growth, to reach 52 million customers, generate 6.3 billion in revenues, increase the EBITDA to US$ 3.4 billion – while improving the EBITDA margin to 53% - and more than double our net profit to US$ 2.1 billion by 2014”