Bader Al-Kharafi: “Zain” paid out 33 fils in cash dividends to shareholders … despite the difficult circumstances


Decisive measures reduced the company’s operating expenses by $ 168 million

$ 1.4 billion in capital expenditures, the majority of which are in expansion and network development projects

– “Zain” obtained the first consumer microfinance license from the Saudi Central Bank to launch “Tamam”

Classifying the group as the best employer in the telecommunications sector in the Arab region and Africa

– “Zain” is the most in possession of 5G networks in the Middle East market

Ahmed Al-Tahous: The pandemic demonstrated the importance of digital platforms as a major driver of business continuity

The Ordinary General Assembly of Zain Group approved the Board of Directors ’recommendation to distribute cash dividends of 33 fils per share for the fiscal year ending on December 31, 2020.

The group stated that the ordinary general assembly, which was held electronically with an attendance rate of 72.49%, approved the cash distributions to the shareholders registered in its records as at the end of the due date set for it on April 1, and that the cash dividends will be distributed to the shareholders who are entitled to it as of next April 7.

The Chairman of the Board of Directors, Ahmed Al-Tahous, said that the Corona virus has broadly affected the economic lifeline, as it caused widespread disturbances in global markets, which witnessed a state of uncertainty, pointing out that the telecommunications sector was the most resistant sector, especially during the period that witnessed Total and partial closures, and the precautionary measures that followed, and restrictions on movement and travel.

He explained that 2020 was an exceptional milestone in the journey of digital transformation, as the pandemic demonstrated the great importance of digital platforms as a major driver for business continuity, indicating that Zain is implementing its strategy to transform into a digital communications provider, and during this period it developed its business portfolio by launching a package of products. Attractive, and cemented its position in the enterprise and business sector for government entities and companies of all sizes.

Protect activities

For his part, Vice Chairman and CEO of Zain Group, Badr Nasser Al-Kharafi, said that the telecommunications sector played a decisive role in protecting commercial and economic activities, during the widespread turmoil in regional and global markets, as a result of closures and precautionary measures caused by the Corona crisis.

He explained that “Zain” is one of the institutions that faced double responsibilities during this difficult period, and was keen to protect work teams and ensure the continuity of communication services without interruption, given the vital importance that the sector performs in maintaining social distancing operations, while maintaining communication and continuity. the work.

He added that, thanks to its digital capabilities, Zain has succeeded in providing innovative services to all societal sectors, and has provided better digital access to medical, commercial, educational, and basic financial services, as its networks responded with high efficiency to the increasing movement of data exchange, after the tremendous change in educational methods, Remote work practices have increased, noting that since March 2020, its networks have recorded an increase of more than 50 percent in data traffic.

Al-Kharafi noted that the group has taken proactive measures at the level of all operations, as at the beginning of the crisis it identified the needs of its customers, and created a crisis management committee under the leadership of the senior executive management, to ensure that all its subsidiary companies implement the procedures and measures recommended to respond to these developments.

He stressed that, in conjunction with these precautionary measures, the group was keen to equip work teams to enable them to carry out job tasks from home, and to improve digital sales channels to enable customers to stay in constant contact, in order to provide

Safety and security.

He continued, “Amidst these developments, (Zain) was keen not to touch the salaries of the work teams, in a move aimed at expressing its appreciation for the continuous efforts during this crisis, and motivating them to continue to provide the best always. These initiatives helped classify the group as the best employer in the sector. Communications in the Arab region and Africa, and the fourth best company in the region by “Forbes” magazine.

Dividend policy

Al-Kharafi said, “In a precedent, the first of its kind in the Kuwaiti market, the Board of Directors (Zain) had recommended a policy of distributing cash dividends at a minimum of 33 fils for a period of 3 years starting from the year 2019, although the group’s operations were affected by $ 417 million as a result of the repercussions of the pandemic, and the impact of translating Coins with $ 110 million in revenue, the group has fulfilled its obligations to shareholders.

He pointed out that the group’s operations achieved revenues of about 1.63 billion dinars (5.3 billion dollars), profits before deduction of taxes, interest and depreciation of 673 million dinars (2.2 billion dollars), and net profits of 185 million dinars (605 million dollars).

Al-Kharafi emphasized that the decisive measures taken by the group during the pandemic helped it reduce operating expenses by about $ 168 million, thanks to preemptive measures to improve costs by renegotiating contracts and managing cash flows, and using the infrastructure of digital platforms as alternative solutions for quick access to customers, in addition to Performs supply chain audits, and follows up on operational plans across all operations to mitigate the effects of economic shutdowns.

Huge digital investments

Al-Kharafi revealed that Zain maintained a strong operational activity throughout the year 2020 despite these conditions, as it focused more on improving the synergies between its operations, and leveraging the enormous geographical footprint of its networks, to take advantage of the growth opportunities provided by the digital platforms.

He pointed out that the group invested in capital expenditures of $ 1.4 billion, the majority of which came from spectrum fees, network expansion and development projects (4G – 5G), building new sites, renewing licenses, and expanding the range of optical fiber services.

He stated that the distinguished proliferation of 5G networks contributed to placing Zain on the global map of 5G networks, as it became the most in possession of 5G networks in the Middle East market.

The largest presence in Kuwait

Al-Kharafi indicated that the “Zain Kuwait” network currently has the largest presence of 5G networks in the local market, while the “Zain Saudi” network enjoys wide coverage, with more than 50 cities, making it the fourth largest fifth generation network in the world.

4Sight strategy

In his speech, Al-Kharafi tackled the latest developments about the group’s business strategy, as Zain has made great progress in its Sight4 business strategy, which is based on business development through continuing digital transformation, continuous development and modernization, and entering into new business sectors that enhance the available growth opportunities. .

He added that as part of this strategy, Zain continues its investments in building new business areas, aiming to transform it into a leading provider in the fields of information and communication technology, and that while it continues to implement its plans within the framework of this strategy, its business has gained new growth opportunities to diversify sources of income.

He mentioned that this period witnessed the first sale and re-lease of towers deal in the Middle East and Africa region, as the group succeeded in concluding a deal to sell and lease its towers in Kuwait for $ 130 million (40 million dinars), and this deal would open new areas for Zain’s operations. Kuwait », and creates greater shareholder value.

“Zain has entered into strategic partnerships in the fields of infrastructure, and we are excited to launch (Zain Data Park), our regional center for cloud hosting and cybersecurity, which will serve our strategic directions in this field,” he said.

Business sector

Al-Kharafi stressed that Zain shows wide interest in the opportunities presented by the business sector, and continues its projects in establishing new entities, entering into major partnerships in the business sector, the Internet of things, smart cities, the fields of financial technology (Fintech), e-health, e-sports, and insurance. Vignette.

He pointed to the expansion of the group’s APIs in its main markets to provide attractive entertainment and games services, and to reap profitable opportunities in the digital field.

He noted that this focus proved the feasibility of investment trends for the group’s operations in the face of the negative impact of the crisis raised by the pandemic, as data revenues achieved a growth of 9 percent in 2020, which represented 41 percent of the group’s total combined revenues.

Al-Kharafi added, “Investing in joint capital provides a range of investment opportunities for the group’s plans in this area. We have expanded our relationships with regional and international investment funds, and we have continued our active participation in a variety of direct strategic investments in emerging companies.”

New growth areas

Al-Kharafi revealed that, in the past year, Zain has strongly entered new growth areas within the framework of the search for opportunities provided by the digital sector, indicating that it has moved to the world of electronic games and launched its new brand, “esports Zain”, to open the way for its new operating entity to enter the fields of Electronic games, as this new entity recently organized major regional tournaments, along with its success in building an active community of players at the regional level.

“Zain obtained the first consumer microfinance license from the Saudi Central Bank (SAMA) to launch the TAMAM platform, which is compliant with Islamic law, which provides microfinance to consumers within less than 5 minutes through a seamless digital customer experience through a mobile application,” he added.

Developments «Zain Saudi Arabia»

Al-Kharafi revealed that “Zain Saudi Arabia” witnessed positive developments in the last year, as its capital restructuring in the last quarter, and the huge demand for remaining priority rights shares, which exceeded an unprecedented 469 percent subscription for them, represented a great confidence from the shareholders in the company’s strategy. And in its business growth plans.

Al-Kharafi explained, “This step will pave the way for the distribution of future dividends, especially as it came after the successful signing of an agreement to reschedule a joint murabaha financing facility for Zain Saudi Arabia with a value of 3.85 billion riyals with a consortium of 8 banks on preferential terms for a period of 5 years until 2025, with facilities up to 6 Billions of riyals ».

Al-Kharafi stressed that the process of selling and re-renting the company’s towers is still ongoing, and that it seeks to obtain the necessary approvals to complete this deal in a manner that serves its ambitions, pointing to the positive indicators that it is witnessing at the present time and its ability to achieve profitability in recent years continuously, which bodes well for the future. Better for growth operations.

Optimism in Sudan

Al-Kharafi said, “The Sudanese market is one of the promising markets in the region, as our operations witnessed good growth in the last year on all financial indicators, and we are preparing to invest and optical home (FTTH), and expand in digital services.

Al-Kharafi pointed out that «the effect of floating the local currency has increased the pressure on our operations, and we have great optimism for the future of our operations in Sudan, which enjoys a large segment of the youth population, and there are positive economic indicators that appear on the horizon, and it is expected that they will better reflect on the economic and social conditions. ».

How did Zain fulfill its pledge to shareholders?

Al-Kharafi explained that the difficult circumstances caused by the pandemic did not prevent Zain from fulfilling its obligations to shareholders, as the Board of Directors recommended the distribution of cash dividends of 33 fils, which represents the second year of the dividend policy approved by the General Assembly, as a cash dividend policy was approved. Worth 33 fils for a period of 3 years, starting from the year 2019.

Al-Kharafi said, “What helped us fulfill our obligations is to provide cash liquidity this year by about $ 350 million, reduce debt by about $ 625 million, decrease total net debt by nearly $ 1 billion, and reduce the ratio of net debt to“ EBITDA ”, including guarantees (to 2 Once), which is below the industry average, the initiatives in operations have ramped up, helping to divert $ 900 million.

$ 900 million in technology investment

Al-Kharafi indicated that Zain has expanded the implementation of its strategy by focusing on digital transformation, home services, electronic stores, and financial technology, and that it has expanded significantly in the latter, as the Zain Cash portfolio has succeeded in transferring the salaries of employees to the Iraqi government at a value of $ 500 million per year. 2020, while the “Zain Cash” portfolio in Jordan succeeded in transferring the salaries of employees by an amount of $ 600 million.

He explained that the expansion of financial technology solutions contributed to strengthening the financial indicators for this period, stressing that Zain’s investments in the technology sector strengthened its digital capabilities, as it invested more than $ 900 million in the fourth and fifth generation networks.

Thanks and Appreciation to the “Clearing House”

Zain expressed its thanks to the Kuwait Clearing Company, and its appreciation for the support and cooperation it extended to the success of the ordinary general assembly activities that it held using the electronic system for holding its general assemblies.

A condolence message to two employees lost by “Zain” in the pandemic

Al-Kharafi began his speech in the work of the General Assembly with a message of condolence and sympathy for the employees who lost Zain during the pandemic, as it lost 6 employees through its operations. And he mentioned the names of the employees in appreciation of their efforts and achievements affecting the work of the company, and to commemorate them.

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