Zain CEO Bader Nasser Al-Kharafi has confirmed that the firm will continue to sell off its infrastructure assets in pursuit of more lucrative investment strategies.
In the last quarter, Zain confirmed the sale of its Kuwaiti tower infrastructure to IHS Holdings for KWD50 million ($165 million), in a deal set to close “imminently”. Zain will then lease the towers back from IHS, with the deal giving it greater freedom of capital to invest in other avenues of business.
Al-Kharafi noted that the deal with IHS marked the “beginning of a strategy to unlock value from our fixed infrastructure, which can be more efficiently deployed in new technologies and higher yielding investments.” Zain expects to extend this strategy to other markets.
Zain’s refocusing of its strategies has been prompted by socio-economic unrest in Sudan hitting its earnings and revenue from the market, in which it is the largest operator. Both its net income and revenue for Q3 fell 6% year-on-year, to KWD40 million and KWD259 respectively. During this quarter, the Sudanese pound devalued by 63%, which Zain has cited as the cause of this drop.
At the end of September, the operator had 12.9 million subscribers in Sudan – a figure which accounts for 29% of Zain Group’s overall customer base. The currency devaluation during Q3 cost Zain KWD44.7 million in revenue and KWD6 million in net income.
Addressing this issue, Al-Kharafi said: “It is unfortunate that one main factor outside of our control, the Sudan currency devaluation issue, has impacted overall results for the quarter and year-to-date. Nevertheless, we draw confidence from the future prosperity of Sudan given the recent lifting of the US sanctions and expected appreciation of the country’s currency.”
