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Mon 20 Feb 2017 06:59 PM

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Zain Group reports slight increase in yearly net profits

Zain's total active customers top 47 million for financial year 2016

Zain Group reports slight increase in yearly net profits
Asaad Al Banwan, chairman of the Board of Directors of Zain Group.

Zain Group reported a two percent increase in full year 2016 net profits, on the back of recorded revenues of KD 1.1 billion ($ 3.6 billion).

The Kuwiait-based telco ended the year serving 47 million customers, reflecting a 3% increase YoY.

Group data revenues (excluding SMS and VAS) increased 6% during 2016, representing 23% of the group’s consolidated revenues.

Several factors impacted on the group's yearly figures, including currencies and legal issues.

"The currency issue in Sudan in the last quarter of 2016 had an adverse impact on the results, as did the settlement of cumbersome litigation in Iraq that resulted in a payment of $93 million," said chairman of the board of directors of Zain Group, Asaad Al Banwan.

"Nevertheless, we draw confidence from both the freeing of our cash deposits in Iraq and the favourable gesture by the Saudi leadership in extending our licence in the Kingdom by an additional 15 years, which had a positive impact on the operation’s financials and growth strategy.”

Zain Group CEO, Scott Gegenheimer said the group was delighted with the success of its data monetisation and Enterprise (B2B) initiatives across Zain's operations, both of which he said are fast-growing and profitable business areas.

"During 2016 in key operations, we built-up dedicated B2B business units and premium B2B care models, installed state-of-the-art IoT/M2M platforms as well as developing new service propositions for Small Medium Enterprises and small home offices, leading to high-double digit sales growth," said Gegenheimer.

"We are excited by the enormous potential that B2B offers and will continue to invest in and develop this strategic area of the business.”

The CEO is further hopeful that the group's strategic investment in smart city solutions is starting to reap benefits and expects exponential growth in this area.

The Board of Directors have recommended a cash dividend of 35 Fils per share subject to approvals.

CAPEX spend for the year amounted to $635 million (excluding Saudi Arabia), reflecting 18% of the group's revenues. The group invested most in 3G and 4G network expansion upgrades across its operations.

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