Pandemic and currency devaluations hit Zain’s Q1 performance
Zain’s revenue, earnings and income were all down in the first three months of 2021 compared with the same period of last year — a time before the pandemic had had its full impact.
Consolidated revenue was down 6% year-on-year to 382 million Kuwaiti dinars, the equivalent of US$1.3 billion. Ebitda was down 7% to $623 million — a margin of 41%. And net income for the quarter was $147 million, down 5%.
However, Zain pointed out net income grew operationally by 4% for the quarter when excluding the one-time gain from the sale and lease back of towers in Kuwait in the first quarter of last year.
Ahmed Al Tahous (pictured), chairman of the board of directors, said: “The board and executive management have been focused on minimising the ongoing impact of COVID-19 and significant currency devaluations in Iraq and Sudan on the business.”
He added: “We are dedicated to ensuring our mobile networks are operating at optimal levels and providing meaningful connectivity to the communities we serve.”
The company noted that foreign currency translation was impacted mainly due to the devaluation in Sudan at the end of February, and a 19% currency devaluation in Iraq. This cost the Zain group $177 million in revenue and $66 million in Ebitda.
The group also pointed to “the widespread disruption in economic and social activity caused by Covid-19.
Vice-chairman and group CEO Bader Nasser Al-Kharafi commented: “Our culture of innovation has been invaluable at this time of rapid change, and our business continuity strategy has been executed impressively to counter these factors.”
He added: “ Both Zain Iraq and Zain Sudan have recently taken measures in dealing with currency devaluations by revamping prices and offering new attractive data monetization packages.”
Al-Kharafi continued: “Given the limitations on mobility, locally and travel abroad, we have continued to play a key role in keeping people socially distanced while remaining connected and productive during the current learning and working from home environment.”