Zain Group CEO Scott Gegenheimer (pictured) put a challenging Q4 down to “exceptional circumstances”, while maintaining confidence in its long term strategy around data monetisation and enterprise.
The company, which operates in eight countries across the Middle East and Africa, reported an 11 per cent year-on-year decline in net income for the quarter to KWD32 million ($106 million), on revenue of $860 million, an 8 per cent drop on the comparable 2015 quarter.
Zain bemoaned a currency translation impact which it said cost the company $83 million in revenue and $42 million in net income, predominately due to the devaluation of currency in Sudan.
“Considering the sound operational progress and transformation we have undertaken across all our markets, it’s unfortunate that exceptional circumstances such as the currency issue in Sudan and tax settlements in Iraq affected our financial performance,” said Gegenheimer.
In December, Zain Iraq negotiated a settlement amounting to $93 million with the country’s finance minister related to capital gains tax on its acquisition of Iraqna, made in 2007.
The company had better to news to report on the results of its investments in 3G and 4G expansions, stating the “upgrades continue to pay off”. Capex amounted to $635 million for the year (excluding Saudi Arabia) on its 3G and 4G upgrades.
Group data revenue for the full year 2016 increased 6 per cent, representing 23 per cent of the group’s consolidated revenue for the year.
Zain generated data revenue growth in each of its markets, the largest being in Saudi Arabia and Kuwait.
Chairman of the board, Assad Al Banwan said the investment reflected “Zain’s commitment to innovation and quality of service”, while Gegenheimer further talked up the company’s efforts around B2B, IoT and smart city solutions.
The company reported 47 million active subscribers for the end of 2016, up 3 per cent from the previous year.