Zain, the Kuwaiti-headquartered firm with mobile operations in eight markets across the Middle East and Africa, posted steady Q1 growth in sales and an 8 per cent jump in net income on the back of booming mobile data.
Mobile data revenue increased by 27 per cent during Q1, year-on-year, and now makes up 15 per cent of group sales.
“[The growth] justifies the huge investment we continue to make in our 3G and 4G networks,” said Scott Gegenheimer (pictured), Zain group CEO.
Over the period, Zain’s group sales were up 4 per cent, to KWD311.1 million ($1.1 billion).
Mobile data momentum is clearly building. Of Zain’s group revenue during H1 2013 ($2.12 billion), mobile data sales accounted for 13 per cent of the total (and grew 19 per cent over H1 2012).
Zain’s Q1 net income rose 8 per cent, to KWD55.9 million, helped by strong earnings performances in Kuwait and Iraq, as well as a steadying of the Sudanese currency (whose weakness badly hurt the group’s bottom line during 2013).
Zain Kuwait notched up net income of $153 million on revenue of $313 million, up 8 per cent and 9 per cent respectively.
Data revenues in its domestic market leapt 23 per cent, year-on-year, accounting for 31 per cent of Zain’s total revenue in Kuwait. The customer base there grew 8 per cent, to 2.5 million.
Zain Iraq’s net income jumped 24 per cent, to $78.3 million, on 3 per cent sales growth (to $432 million).
“The operation performed remarkably well and we expect Zain Iraq to be one of the group’s major growth drivers in all facets of the business during the course of the year,” said Gegenheimer.
The CEO added that 18 per cent growth in customer numbers – to 16 million – “bodes well for the on-going development of the company given the imminent granting of 3G spectrum this year”.
Zain Iraq is the largest contributor to the group’s customer base (35 per cent of total) and accounts for 40 per cent of consolidated revenues.
Reuters reported on Sunday (20 April), however, that Zain had filed a bourse statement saying it had been sued for $4.5 billion over its 2007 acquisition of Iraqna, an Iraqi telecom operator.
Zain bought Iraqna for $1.2 billion from Orascom Telecom in December 2007, reports Reuters, and then merged it with its Iraqi unit (Atheer) before renaming the new entity Zain Iraq.
Zain does not identify the firm making the claim (which apparently filed the lawsuit last August) but the claimant alleges that Zain’s takeover had stopped the firm buying Iraqna, and caused it losses of $4.5 billion.