Zain half-year 2008 results, surpasses 50m customers milestone

Zain, the leading mobile telecommunication operator in the Middle East and Africa present in 22 countries, announces today its consolidated financial results for the first half of 2008. The results showed significant growth in revenues with customer numbers exceeding 50 million.

H1-2008 Key Performance Indicators

For the first half of 2008, Zain Group recorded consolidated revenues of US$ 3.488 billion, an increase of 26% compared to H1-2007. The company’s consolidated EBITDA increased by 20% for the same period to reach US$ 1.305 billion. Zain consolidated net profits reached US$ 551.5 million, an increase of 7% on H1-2007 profits.

Year on year customer growth across the two continents where Zain operates was 58% with the Zain Group serving 50.74 million managed active customers at 30 June, 2008.

Commenting on the company’s H1-2008 financial results, Zain CEO, Dr. Saad Al-Barrak said: “On the back of splendid results for 2007 and the first quarter of 2008, despite fierce competition in many markets we are elated that Zain continues its excellent performance in the first half of 2008. Highlighted by crossing the 50 million customer milestone, these impressive results reflect the exceptional operational efficiencies in a company that is investing heavily and rapidly expanding across two continents.”

Dr Al-Barrak added, “We have started to reap the rewards of our recent large investments particularly in Iraq, Nigeria and Sudan with these 3 countries now serving more than half of Zain’s 50 million customers, and we expect similar rewards when our operations in Saudi Arabia and Ghana commence commercial operations.”

Zain in Saudi Arabia
Further to Zain Saudi Arabia’s successful listing on the Saudi Stock Exchange and a share price currently trading at double its initial offering, Zain has committed capital investments to date in networks exceeding US$1.5 billion in the Kingdom of Saudi Arabia. Currently the operation is testing the network with thousands of friendly users and Zain confirms that it will commence commercial operations by the end of August 2008. “We look keenly forward to launching our modern network and commercial offerings in the Kingdom, promising to offer the Saudi community world class telecom services. We are confident that our investment in the Kingdom will reap rewards for all our stakeholders.” said Dr Al Barrak.

One Network in the Middle East
After its widely praised and successful launch in Africa offering customers favorable rates for cross-border communications, on April 14, 2008 Zain introduced the world’s first borderless ‘One Network’ mobile service to 14 million customers in four countries in the Middle East-Bahrain, Iraq, Jordan and Sudan. On this, Dr Al Barrak noted “One Network’s preferential offerings removing borders and high roaming charges have been warmly welcomed and we expect it will be the catalyst for further growth in customer acquisition as we soon plan to link the 2 continents.” Saudi Arabia and Ghana will join One Network on launch of commercial services. Zain plans to roll-out One Network in all its operations, subject to regulatory approvals.

Capital Increase to raise in excess of US$4 billion
Zain also announces that the capital increase subscription period (as approved at the Annual General Assembly meeting on March 2008) will take place between August 17, 2008 and September 18, 2008. This capital increase will raise approximately US$4.4 billion. “Zain aspires to be a top-ten global telecom company by 2011 and increasing the company’s capital will provide the company with the liquidity necessary to continue its ambitious expansion strategy, while reducing the borrowing costs of the company’s operations and increasing shareholder value in the long term” concluded Dr Al Barrak.

Zain brand and community support
On June 27, 2008 the Zain brand was revealed to 50,000 concert goers and a worldwide TV audience of one billion as Zain was the main sponsor of a vast outdoor concert held in Hyde Park, London, honoring the former President of South Africa and Nobel Prize Laureate, Mr. Nelson Mandela on the occasion of his 90th birthday. The event raised substantial funds for his charitable work, as well as increasing the profile of African artists who Zain sponsored to attend and perform at the concert. Zain gave people across Africa the chance to participate in the event by offering its mobile phone networks to well-wishers wanting to send text messages wishing Nelson Mandela a happy birthday. All the money raised from this was given to the 46664 foundation.

In May 2008, Zain announced that it is partnering with the Earth Institute and Ericsson in providing mobile telephony and internet connectivity to over 400,000 people in remote areas in 10 sub-Saharan African countries as part of the Millennium Villages projects. This builds on Zain and Ericsson’s previous collaboration when the companies joined forces and upgraded and expanded Celtel’s infrastructure by building an additional 21 radio sites to provide mobile coverage up to 20 kilometers into Lake Victoria. This will ensure mobile coverage to over 90 percent of the fishing zones, where up to 5,000 people have lost their lives each year from accidents and piracy.

About Zain
Zain is a leading emerging markets player in the field of telecommunications aiming to become one of the top ten mobile groups in the world by 2011. Zain was established in 1983 in Kuwait as the region’s first mobile operator. Since 2003, it has grown significantly becoming the 4th largest telecommunications company in the world in terms of geographic presence with a footprint in 22 countries spread across the Middle East and Africa providing mobile voice and data services to over 50.74 million active customers (as at 30 June 2008).

In the Middle East the company operates under the Zain brand name in Bahrain, Iraq, Jordan, Kuwait and Sudan. In Lebanon the company operates as mtc-touch. Zain plans to commence operations in the Kingdom of Saudi Arabia in August 2008.

In Africa, Zain operates under the Celtel brand (www.celtel.com) in 14 sub-Saharan African countries namely: Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Kenya, Malawi, Madagascar, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia. The company’s mobile telecommunications operations in Ghana will begin in Q4, 2008.

The Zain brand is wholly owned by Mobile Telecommunications Company KSC, which is listed on the Kuwait Stock Exchange (Stock ticker: ZAIN). The company had a market capitalization of over US$25.8 billion on 30 June 2008.