Mobile Telecommunications K S C P : Transcript of the Analysts Conference

Q1 2022

Earnings Conference Call

Apr 25, 2022

Zain Group Q1 2022 Earnings Call Transcript

Monday 25 April 2022

1:30 PM Kuwait Time ----------------------------------------------------------------------------------------------------------------

Zain Group Executive Management:

Ossama Matta - Group Chief Financial Officer Mohammad Abdal - Group Chief Communications Officer

Mohammed Shereef - Group Head of Finance

Iyadh Borgi - Group Operation & Business Perf. Executive Director

Aram Dehyan - Group Investor Relations Director

Moderator:

Faisal Al Azmeh, Goldman Sachs

Faisal Al Azmeh:

Greetings ladies and gentlemen, this is Faisal from Goldman Sachs, and I would like to welcome you all to the Zain Group's Q1 2022 Results Conference Call. It is my pleasure to host Zain Group senior management today on the call. By now you should have received the company's presentation and earnings release for the 1st quarter and detailed financials which have all been uploaded on the Group's website.

Now without further delay, I will hand the call to Mohammad Abdal, Zain Group's Chief Communications Officer. Thank you.

Mohammad Abdal:

Thank you, Faisal. And welcome everyone to Zain's Q1 2022 earnings conference call. With me today Ossama Matta, Group CFO, Mohammed Shereef - Group Head of Finance, Iyadh Borgi, the Operation & business Performance Executive Director and Aram Dehyan, IR Director.

In a moment, we will take you through the IR presentation which has been posted earlier today on our corporate website, and after that we're happy to answer any question, you may have.

During this call, we will be making forward-looking statements which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties.

Please refer to our detailed cautionary statement found in slide number 2.

With that, I will now turn the call over to Ossama.

Ossama Matta:

Thank you, Mohammed. Good afternoon to everyone and thank you for joining us on today's call.

We had a strong start to the year, delivering robust results for Q1 2022, achieving numerous milestones, Revenue and profit growth across all key operations. In particular, Zain Kuwait, KSA and Sudan performed very well in net profit terms.

Our continued focus on monetizing 4G & 5G networks, targeting consumers, businesses and governments, saw significant growth across several key markets with data revenue reaching USD 536 million. This represents 40% of consolidated Revenue, and would have been much higher, if not for the currency devaluation impact in Sudan.

Moreover, we are extremely pleased with our B2B revenue growth of 19% YoY, that witnessed the addition of many key corporate and government related accounts across our footprint.

Let me start off by noting several significant accomplishments that occurred recently. On page 6 of the presentation a very positive note about Zain Brand:

Brand Finance, the main reference for telecom valuations, increased Zain's brand value by USD 211 million (up 10%) to USD 2.4 billion.

After a 3-year break, we attended MWC Barcelona last February and we entered multiple strategic deals that have been announced over the last month.

On Tower Update:

• • The Board of Zain Saudi Arabia approved the sale of its 8,069 towers for SAR 3.03 billion (USD 807 million) to PIF. This transaction, a first-of-its kind in KSA, will create enormous shareholder value. We expect this to finalize in the coming months.

  And as we mentioned previously, similar TowerCo transactions are in progress in both Iraq and Sudan, and we will be providing more details in future calls.

• • Our wholesale arm, Zain Global Connect in partnership with Zain KSA announced first investment in PEACE cable through the J2M (Jeddah, KSA to Marseille, France) submarine cable system that will be operational in Q1, 2023.

• • In Kuwait, ZainTech launched a comprehensive range of managed cloud services and cybersecurity solutions for corporate customers, other key markets will follow.