Mobile Telecommunications Company (ZAIN) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue grew 2% YoY to $3.1 billion (KD 944.8 million), with normalized EBITDA up 1% and normalized net income up 11% YoY, despite a 9% YoY drop in active customers due to the Sudan crisis.

• Net profit for the period was KD 95.3 million, a significant decrease from KD 198.3 million in the prior year period, mainly due to foreign currency translation losses and Sudan-related impairments.

• Strong operational recovery in Sudan, with 5 million customers returning and network stabilization, though only 40% of sites are active.

• Major strategic initiatives include the creation of the largest tower company in MENA, expansion of digital and fintech services, and continued 5G rollout.

Financial highlights

• H1 2024 revenue: $3.1 billion (+2% YoY); EBITDA: $1.1 billion (+1% normalized YoY); Net income: $265 million (+11% normalized YoY); net profit margin at 10.1%, down from 21.3% YoY.

• EBITDA margin at 34%; EPS at 6 cents (19 fils).

• Net income and EBITDA declines on a reported basis due to one-time gains in H1 2023; normalized growth excludes tower transaction and number range claim.

• Impairment of Sudan assets ($20 million) and FX impact from Sudan crisis ($95 million revenue, $41 million EBITDA loss).

• Operating and administrative expenses increased to KD 289.7 million; depreciation, amortization, and impairment charges rose to KD 176.0 million.

Outlook and guidance

• Board declared interim dividend of 10 fils per share for H1 2024, maintaining a minimum cash dividend policy of 35 fils per share for three years.

• Management expects to continue operations as a going concern, with adequate resources for at least 12 months.

• Continued focus on digital transformation, 5G expansion, fintech, and infrastructure optimization.

• Ongoing monitoring and proactive measures are in place to address risks in Sudan and other markets.