Mobile Telecommunications K S C P : محضر مؤتمر المحللين

Zain Group

Q4 2021

Earnings Conference Call

Feb 10, 2022

Chaired by: Omar Maher EFG Hermes

Zain Group Q4 2021 Earnings Call Transcript

Thursday 10th February 2022

5:00 PM Kuwait Time

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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 Performance Director

Aram Dehyan - Group Investor Relations Director

Moderator:

Omar Maher, EFG Hermes

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Omar Maher:

Good afternoon ladies and gentlemen, thank you for standing by. Welcome to today's Zain Group's Q4 2021 Results Conference Call. At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session. I must advise you that this conference is being recorded today, Thursday, 10th of February 2022.

I would now like to hand the conference over to your first speaker today, Mohammad Abdal, Chief Communications Officer, Zain Group. Thank you, please go ahead

Mohammad Abdal:

Thank you, Omar, and welcome everyone to Zain's Q4 & FY 2021 earnings conference call. With me today Ossama Matta, Group CFO, Mohammed Shereef, Group Head of Finance, Iyadh Borgi, Group Operation & business Performance Director and Aram Dehyan, Group Investor Relations 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:

Good afternoon and thank you all for joining us on today's call. We announced our Q4 and Full Year 2021 results earlier today and hope everyone here had the chance to go through the earnings release and see the presentation.

2021 was a successful year on multiple fronts due to the meticulous execution of our 4Sight strategy and the board and executive management are pleased with the overall results. The solid financial performance was due to the success of many operational and monetization initiatives management implemented across all markets.

Our continued focus on digital strategy saw significant growth across several key markets with data revenue reaching USD 2.1 billion, which represents 42% of consolidated Revenue and would have been much higher if not for the currency devaluation impact. Moreover, B2B Solutions witnessed a 17% YoY growth.

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Let me start off by noting several significant accomplishments and transactions that

occurred recently. On page 5 of the presentation.

• As mentioned in our previous call, in October 2021, the Ordinary General Assembly approved the first semi-annual cash dividend of 10 fils per share for H1-2021, distributing $143m.
  Today the Board also recommended a cash dividend of 23 fils per share for the second half of 2021, subject to AGM and statutory approvals. This will total 33 fils per share for the year, in line with the 3 year commitment we made in 2019. The total distribution for the year will be ~USD 473 million, representing a 77% payout ratio. We believe this ratio is one of the highest in the region and reflects the strength of our financial solvency.
• In December 2021, Zain Jordan successfully completed the sale and leaseback of 2,607 towers for USD 88 million, providing more flexibility for the operator to invest in network upgrades and ICT technologies.
  Zain KSA also received a USD 807 million non-binding offer from the Kingdom's Public Investment Fund (this is currently undergoing due-diligence and expected to close during first half of 2022.
  Similar TowerCo transactions are in progress with the remaining OpCos and we will be providing more details in the future calls.
• In December 2021, the Group received a non-binding purchase offer to acquire 100% of the Group's stake in Zain Sudan and the Kuwaiti Sudanese Holding Company for USD 1.3 billion. Discussions are ongoing and Zain Group will do what's best for all stakeholders.
• We are very pleased that for the first time since 2007, the Zain Sudan board decided to distribute SDG 15 billion (~30m USD) of dividend to Zain Group. This represents 45% payout ratio.
• We launched "ZainTech" in Oct 21, a one-stop shop servicing enterprises and governments across the region. ZainTech is the Group's center of excellence providing managed solutions for cloud, cybersecurity, big data, IoT, AI, smart cities and emerging technologies incorporating NXN and Zain Data Park.
• Zain Ventures invested in ZoodPay, 'Buy Now Pay Later' super app series B USD 38 million round, following earlier investments in PIPE and Swvl. We also made additional investments in leading VC funds such as MEVP, BECO Capital and Valor Capital.

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