Mobile Telecommunications Company K.S.C.P. (ZAIN) Earnings Call Transcript & Summary

This meeting is being recorded.

Good morning and good afternoon, everyone. This is Omar Maher from EFG Hermes. Ramadan kareem to all of you. I would like to welcome everyone to Zain Group's Full Year 2024 Results Call. As usual, the call will began -- begin with a discussion of the key highlights of the period, and this will be followed by a Q&A session. The financial statements and the presentation are available on Zain Group's website. And I would now hand the call over to Mohammad Abdal, Group Chief Corporate Affairs and Communications Officer, to begin the call. Thank you very much.

Thank you, Omar. And welcome, everyone, to Zain's Group Full Year 2024 Earnings Conference Call. I'm joined today with Ossama Matta, our Group CFO; and Kamil Hilali, our Group Strategy Officer; and Mohammed Shereef, our Group Head of Finance; Aram Dehyan, Group IR Director; and [ Khaled Al Kandari ], our Group Treasury Director. And a -- in a moment, we will take you through the IR presentation which was posted earlier today on our website. And after that, we're happy to answer any question you may have. During the call, we will be making forward-looking statements, which are prediction, projections or other statements about the future events. These statements are based on the current expectations and assumptions that are subject to risks and uncertainties. Please refer to our detailed cautionary statement found on Slide #2. With that, I will now turn the call over to Ossama Matta.

Thank you, Mohammad. Hello, everyone, and welcome to our Full Year 2024 Earnings Call. I am proud to announce that we exceeded our full year guidance for 2024 of 80% to 85% of 2023 net profit, delivering strong financial performance across all key metrics. We achieved the highest revenue in last 15 years. Our results reflect strong revenue growth across our markets, except, of course, for Sudan where the ongoing crisis and currency headwinds continues to pose challenges. I would like to highlight the progress of our new growth verticals, which is ZOI, ZainTECH and the fintech, that were born out of the 4Sight strategy. These verticals have played a pivotal role in boosting Zain Group's revenue, delivering an additional $253 million in 2024, a remarkable 130% year-on-year increase, which represents 7% of the total group revenue for the year. This success validates our 4Sight strategy that was implemented in 2019 to expand beyond traditional telecom boundaries. 5 years after the implementation of 4Sight, the strategy, in December 2024, we unveiled our new 4WARD-Progress with Purpose corporate strategy to accelerate the company's evolution into a purpose-driven techco conglomerate providing better lives and lasting connections. 4WARD is focused on continuity, acceleration, collaboration and digital innovation in 2025 and beyond. The strategy was formulated internally and builds on the significant momentum and transformational accomplishments made under the previous 4Sight corporate strategy. We are confident that it will drive meaningful impact in shaping societies while further enhancing shareholder value. Looking at these verticals, we'll start with Zain Omantel International, which is ZOI. ZOI is now the highest-ranked carrier network in the region and among top 100 globally. Leveraging the strengths of Zain and Omantel, ZOI delivers high-quality Internet, voice, roaming and messaging services to our customers across our footprint and beyond. For 2024, ZOI's revenue soared by 455% year-on-year to reach $200 million, driven by key partnerships and infrastructure expansions with the likes of Meta, Google, AWS, et cetera. We see ZOI as a strong and scalable business. And we will continue to invest in its wholesale connectivity and infrastructure capabilities to support further growth and expansion. The second one, which is ZainTECH. ZainTECH's organic growth and strategic acquisitions in collaboration with Zain's B2B teams across operations are driving enterprise revenue growth across the group. During 2024, ZainTECH generated $118 million of revenues, up of -- up 103% year-on-year, and contributed 8% of the group-wide enterprise revenue, fueled by B2B mobility and expanding ZainTECH's key enterprise and government customer acquisition. The growth follows the February 2024 opening of its regional offices in Riyadh to complement its UAE head office; as well as having teams and offices in Kuwait, Jordan, Iraq and Bahrain. Also contributing to this growth were ZainTECH's acquisition of BIOS, Adfolks, STS in Jordan and recently Citrus consulting that have all solidified Zain's position as the connectivity and enterprise partner of choice for businesses and government entities across the region. Given the significant potential of this business segment in key markets of UAE, KSA, Kuwait, Iraq and Jordan, we remain committed to investing the necessary resources to sustain and accelerate ZainTECH's momentum. The third one, which is fintech. Zain's fintech arm contribute -- continues to grow with strong revenue and customer expansion across our entities in KSA, Iraq, Jordan and most recently Bahrain -- and expected to roll out in Kuwait and Sudan. In 2024, fintech revenue reached $176 million. This is combined revenues of the fintech, up 19% year-on-year, with 96 million transactions processed, totaling $12.4 billion in transaction value. We are further expanding our fintech footprint, having secured an electronic money services license from the Central Bank of Kuwait in July 2024, with a soft launch of Bede planned for -- in Q1 2025. Additionally, our Bede mobile wallet is set to launch in Sudan in early 2025, pending final regulatory approvals. With the upcoming launches in Kuwait and in Sudan, we will complete our digital financial service expansion across all our markets. Tower company updates. Our tower company business continues to make significant progress. Under project signal TASC, we are advancing towards operational readiness. We are now awaiting final regulatory approvals from the Qatar communication regulatory authority to proceed with asset and share of -- transfers. Further expanding our passive infrastructure ambitions, we acquired the remaining 70% stake of IHS, an independent, licensed tower company that owns 1,675 sites and manages an additional 700 sites, to form part of project signal. The deal was successfully completed in Q4 2024, was actually completed in December, securing regulatory approvals in record time. This transaction will strengthen TASC's market position, unlock synergies with Ooredoo's Kuwait portfolio and enhance shareholder value through portfolio consolidation. This move will -- also complements our strategic agreement with Ooredoo to create the largest tower entity in the region supporting a sustainable and independent operating model that will enable more efficient infrastructure sharing, reduce carbon footprint and accelerate the region's digital transformation. On the corporate sustainability, in the climate action front in particular, Zain has achieved a major milestone with science-based target (sic) [ Science Based Targets ] initiative's approvals of its net zero targets. We are committed to reducing scope 1 and scope 2 of GHG emission, which stands for greenhouse gas, by 42% by the year 2030; and achieving a 90% reduction by 2050, making us the only Kuwaiti-based corporate with verified SBTi emission reduction targets. Also notably is the ESG rating upgrade to BBB by MSCI in Q4 of 2024, which reaffirms Zain's commitment to sustainability, corporate governance and ethical leadership that is value creative for all stakeholders. We aim to further upgrade this to an A grading through the introduction of many internal initiatives across our footprint. Both these complement a distinct milestone for 2024 that saw Zain maintain for the third year in a row its leadership position of A- score in the CDP score report climate change. This grade, first achieved in 2021, positions Zain as the highest-ranked and only telecom operator in the Middle East and Africa to achieve this high rating. These efforts solidify Zain's position as a leader in sustainability, ensuring a -- positive environmental and social impacts while driving long-term value creation. One more highlight before we get into the financials. We were just informed by Brand Finance that Zain brand has reached a valuation of $3.5 billion for 2025, up 14.5% from the $3 billion valuation in 2024, further enhancing its AAA- brand strengths. This solidifies Zain's position as the #1 telco brand in Kuwait; and across most of our markets, Iraq, Jordan and Sudan, reflecting the strengths of our business, customer trust and continued market leadership. We will continue to focus on enhancing the Zain brand value and take it to new heights. Currently we are actively exploring avenues to reposition the Zain brand through a new architecture aiming to amplify its value by capitalizing on the collective strengths of the various new business entities under the new techco umbrella. And stay tuned for more on this. Now moving to the financial highlights of the year. In 2024, Zain Group ended the year serving over 49 million customers. Customer base grew for Iraq, KSA, Jordan and South Sudan. That compensated the steep decline in Sudan largely attributed to war, social unrest and displacement crisis in the country. Despite this challenge, our focus on operational resilience and market adaptability kept us on a strong trajectory. This resilience paid off as Zain achieved its highest revenue in 15 years, with consolidated revenues climbing to KWD 2 billion, which is $6.4 billion, up 3% year-on-year. Consolidated EBITDA for the year reached KWD 689 million, which is approximately $2.25 billion, up 2% in normalized terms, normalized if we exclude basically the number range impact in 2023, and delivering a healthy 35% EBITDA margin. Building on this top line strength, consolidated net income reached KWD 208 million, which is $677 million, representing normalized net income growth of 15%. And this is basically by adjusting for the number range as I mentioned earlier and the tower transaction gain in 2023; and also isolating the impact of the business combination from acquisition, the gain on the business combination from acquisition of IHS, which is approximately $80 million, in 2024. Our earnings per share for the full year is at KWD 0.48. On the dividends. Last week, the Board recommended a cash dividend of KWD 0.25 per share for the second half of 2024. This follows the semiannual dividend of KWD 0.10 per share distributed in Q4 2024, bringing the total dividend for the year of KWD 0.35 per share. This reflects a 70% payout ratio, one of the highest among listed entities in the region; positions Zain among the top 15 global telecom entities in creating shareholder value over the last 5 years. And this is in -- according to a BCG report. In line with the Board's previously committed minimum cash dividend policy of KWD 0.35 per share which commenced in 2023, till 2025, the Board has also recommended renewing this policy for an additional 3 years covering the period from 2026 to 2028. This recommendation remains subject to approval of the annual general assembly, ensuring Zain's long-term commitment to sustainable shareholder value. On the CapEx. Total CapEx for the year reached $1.1 billion, representing 17% of revenues, $976 million in tangible CapEx and $91 million in intangible strategically allocated to key markets. Zain KSA recorded the largest investment with $396 million directed towards expanding 5G coverage, modernizing core infrastructure; and followed by Iraq, $243 million, investments mainly to enhance LTE coverage across major cities such as Baghdad, Basra and Anbar, and the deployment of 700 new sites over the year. Meanwhile, Kuwait invested $126 million to improve indoor 5G coverage and strengthen its digital systems. Despite the challenges in Sudan, we allocated $137 million to support network resilience, focusing on disaster recovery locations and the implementation of a new billing system. The group continues to maintain healthy cash flows, with total due to banks at $4.8 billion and net debt-to-EBITDA currently standing at 2.2x. And finance cost, when we compare it with last year, remains the same. To conclude. 2024 has been a year of outstanding performance and strategic achievements. We delivered the highest revenue generated in the last 15 years, expanded our noncore capabilities and reinforced our leadership in 5G and cloud solutions. Despite external challenges, we have remained resilient, innovative and committed to sustainable growth. Our focus on diversifying revenue streams, digital transformation and operational efficiency continues to position Zain Group as a market leader. Looking ahead, we are expecting another successful year in 2025. We anticipate our revenue to grow approximately 7% to 10%. With normalized net income, if I exclude IHS gain of $80 million this year, 2024, we expect the net income to grow between 3% to 5%. This is despite the increase in expected tax expenses in 2025 due to the implementation of Pillar 2 income taxes in low-tax jurisdictions such as Kuwait, Bahrain and UAE. Our expectations of the tax is approximately Pillar 2 $26 million additional tax. We are still in the process of assessing the Pillar 2 tax impact, noting that the executive regulations for Kuwait have not been issued. Our CapEx-to-revenue ratio is expected to remain at the healthy range of 15% to 17%, ensuring sustained investment in network enhancements, digital transformation and growth [ verticals ]. Furthermore, Zain remains committed to delivering strong returns to its shareholders. We will continue honoring our minimum cash dividend policy of KWD 0.35 per share. Before handing it over to Mohammed Shereef to walk you through our operational performance, I want to take a moment to express my deepest [indiscernible] to our employees, customers and shareholders and, of course, our Board for their unwavering trust and support. Our dedication and -- your dedication and our dedication and confidence in Zain continue to drive ourselves. Wishing you all a blessed Ramadan. Thank you.

Thank you, Ossama. Ramadan kareem, everyone. Moving to the opcos, let's go to Zain Kuwait. Zain Kuwait maintained its market leadership position in 2024, achieving strong financial and operational growth despite intense market dynamics. As the leading telecom operator in Kuwait, Zain captured 38% of the revenue market share, reinforcing its dominance. The postpaid segment grew by 2.2% year-over-year, further strengthening our position in the market, with our customer base reaching to 2.6 million. For the full year, Zain Kuwait's revenue grew 4% year-over-year to KWD 373 million, USD 1.2 billion, while EBITDA increased 6% to reach KWD 139 million, USD 454 million, reflecting a 37% EBITDA margin. Net income surged at 37% year-over-year to KWD 110 million, USD 358 million, driven by an $80 million transaction gained from the step-up acquisition of IHS Zain Kuwait TowerCo in Q4 '24. Data revenue also played a key role, contributing 35% of total revenue, highlighting the continued shift towards a digital and high-value service. Zain Kuwait recently established a digital factory and operational model to centralize and accelerate the creation and managing of appealing digital products and services for customers. This initiative will see its success stories rolled out across other opcos. Moving to Zain KSA. Zain KSA delivered solid performance in 2024 achieving all-time-high revenue of USD 2.8 billion, up 5% year-over-year, with EBITDA reaching USD 886 million, reflecting a 32% EBITDA margin. Normalized net income surged 354% year-over-year to USD 159 million. This is excluding the one-off gained from the sale of 8,069 towers back in 2023. With its dynamic 5G network covering 66 sites, data revenue grew 5%, represents 40% of total revenue, while the customer base expanded 4% year-over-year to 9.3 million. Zain KSA also made significant advancement in 5G technology, introducing advanced 5G slicing solution to serve enterprise customers with dedicated Internet and intranet services. Additionally, the company acquired a 30-megahertz license in the 600 megahertz spectrum band for SAR 624 million, approximately $166 million, valid for 15 years. All business segment witnessed strong year-over-year growth, with 5G data traffic increasing 31% year-over-year; B2B, by 3%; Yaqoot, Zain KSA's digital operator arm, growing by 13%; and Tamam, its consumer microfinance arm, seeing a 30% revenue increase. Zain KSA's commitment to sustainability and governance was also recognized, earning a AA rating in the MSCI ESG index, placing it in the leader category. Moving to Zain Iraq. Zain Iraq delivered exceptional performance in 2024, achieving its best financial results in the last decade and marking a milestone year of the unprecedented growth. This has been powered by the vast network expansion, as Ossama mentioned earlier. The company recorded double-digit growth across all major financial metrics, with revenue growing 11% to USD 1.1 billion. EBITDA surged 18% to USD 441 million, reflecting an EBITDA margin of 41%. And net profit reached USD 130 million, up 47% year-over-year. The operator also saw significant customer growth, with its customer base increasing by 10% to 19.7 million customers. Operationally, Zain Iraq has been at the forefront of innovation and market leadership. The launch of new commercial offers has been a major success capturing a growing share of the market and further strengthening our position. Moving to Zain Jordan. Zain Jordan delivered a solid performance in 2024, maintaining its market leadership while achieving steady financial and operational growth. Revenue increased 6% year-over-year to USD 556 million, with EBITDA rising 4% to USD 224 million, reflecting an EBITDA margin of 40%. Net income for the year grew 3% to USD 79 million. With the expansion of 4G, the rollout of fiber and the launch of 5G services across the country, data revenue grew 8% year-over-year, now representing 51% of the total revenue, highlighting the growing demand for the high-speed connectivity and digital services in the country. Additionally, Zain Jordan's customer base expanded by 6% to 4.2 million. Zain Sudan. Zain Sudan faced an exceptionally challenging year in 2024 as the ongoing war, economic instability and severe currency devaluation significantly impacted operations. Since April 2023, site access, fuel shortages and network maintenance disruptions have posed major obstacles. In February 2024, a full network blackout was followed by the shutdown of our main data center in Khartoum. However, by March 2024, we managed to partially restore connectivity through a disaster recovery site in Port Sudan. To enhance network resilience, we implemented [ Starlink ] for BTS black hauling (sic) [ backhauling ], restoring over 100 sites and reconnecting more than 500,000 customers. Additionally, we secured fast-track approvals for a new submarine cable project connecting Port Sudan to Jeddah, further strengthening international connectivity through ZOI. Full year revenue reached USD 260 million, while EBITDA stood at USD 112 million, reflecting an EBITDA margin 43%. Net income reached USD 116 million. Despite these challenges, Zain Sudan made strategic price adjustments and implemented network recovery initiatives, leading to a revenue rebound towards the end of Q3 '24 -- revenue, plus 38%, Q4 '24 versus Q3 '24. On the commercial and customer experience front, we focused on restoring dedicated customer services agents; launching appealing, new packages; and introducing digital services, helping customer numbers to reach 10.1 million. Additionally, Zain Sudan diversified its distribution channels, becoming the market leader with over 150 retail shops and digital service facilities across Sudan. Finally, Zain Bahrain. The operators generated revenue of USD 205 million, up 7% year-over-year. EBITDA increased 5% to reach USD 63 million, reflecting an EBITDA margin of 31%. Net income grew 2% to reach USD 15.7 million. Data revenue grew 6% to represent 46% of the total revenue. With that, I will hand over to Mohammad Abdal for Q&A.

Thanks, Mohammed. With that, we'll now move to the Q&A session. [Operator Instructions] Omar, can you please repeat the instruction for the Q&A?

Sure. Thank you for the presentations.

[Operator Instructions] And the first question is from Maddy Singh. Maddy, your mic was unmuted, but we couldn't hear you, so maybe we'll try again. I think we have you now.

Can you hear me?

Yes.

Yes. Finally, I'm able to ask a question on webex, so...

[indiscernible]

My first question is on the IHS tower you bought. So if you could just give some brief details on that transaction. Has it already been closed? And what do you plan to do with those towers? I think you are probably like going to use them to contribute to the TASC transaction, so what impact will that have on your deal with the -- with Ooredoo, on TASC transaction? Would it reduce your payment you were supposed to do for equalization of stake? So just some color around that or how all this will fit together. And second question is on your performance in Iraq, if you could just talk about -- the growth rate of 7% looks good, but I'm just wondering whether this is below potential. Has there been any update to the regulatory or competitive environment? And especially, also I wanted to know about the new -- the 5G license, which probably is going to be due soon. So what kind of amount we should factor in for that, if you can talk about that.

All right, thank you for your question. I'm going to take the first part of the question, related to IHS. So this is Kamil Hilali. I'm the chief strategy (sic) [ Chief Strategy Officer ] for Zain Group. So look. I mean the transaction was actually fully closed end of December. So we got all approvals required for it and we were able to close the transaction end of December. The rationale for the transaction, I mean, twofolds. I mean IHS, frankly, I mean, they're looking to exit the market. I mean that's one, but for us it's something that we've seen as an opportunity to complement the signal transaction, which is the Ooredoo transaction. As you know, for signal, I mean we are looking to 6 markets, of which Kuwait is 1, okay? And to be able to actually close the transaction in Kuwait, you're going to need a license, a TowerCo license. And we've seen it through the previous process in Kuwait. When IHS was trying to get the license, it took them about 3 years, right? So for us I think it's a great opportunity to get the license to operate our core business in Kuwait for the purpose of signal transaction. That's one. Second thing, of course, is the consolidation because Kuwait is a small country, at the end of the day. And the potential for synergies and consolidation between the 2 portfolios is really significant, okay? I don't know whether basically -- I'm going to throw in some numbers here, but I mean -- we looked at it, I mean. Just it's still top-down basic analysis, but we're looking at north of $100 million of synergies between the 2 portfolios. This is on the conservative side. So this is the rationale. I mean it has been closed. It's basically a complement to the signal transaction, and there is a lot of synergies between the 2 portfolios. This is for IHS -- yes...

And -- but like, with the TASC deal, signal transaction, if you could give the numbers around how much you were supposed to pay for the equalization of the stake. And [ will these towers ]...

Yes, yes, yes, clear. So look. I mean the way the transactions...

[indiscernible] how much will you have to pay now.

Yes. So now -- I don't have the numbers in front of me, but I'm just going to give you basically high-level view. But indeed, signal transaction was done in a way that we will contribute TASC as a portfolio, all right, from Zain's side. As we add more countries or portfolios from Ooredoo [ side's ], if any times we become lower in terms of shareholding, then we equalize, all right? And this is why basically we're expecting over the -- starting the first closing. And for the remaining time we'll be in closing the other markets, we will be paying, I think, between $500 million to $600 million. This is what we're expecting, at most, okay, to equalize the 2 portfolios and to maintain a shareholding equal to Ooredoo's. So this is basically how it was structured initially. Now that we have an additional country or portfolio with us, basically, I mean, we're contributing more, okay? It means we're not contributing just TASC. We're going to be contributing TASC and IHS Kuwait. And as such, basically our equalization will be lower. This is what we're expecting. And it will be lower by about -- I'm thinking $135 million or $130 million lower.

Right, right, right, okay.

Yes. Okay, this is the first part of your question...

[indiscernible]

Yes. I'm going to let the -- let Ossama or Mohammed Shereef address the second part.

Thank you, Kamil. Regarding Iraq: Iraq performed really well in the -- especially in the second half of the year, good performance on the B2C. We have new products in place that have been pushed into the market. Also, on the B2B, we gained very good government projects, [ especially on the ] government projects, in the last quarter. We see a very important growth here in this business. And also we have done a lot of fixes within the reach, whether it's on the distribution side and -- or on the oodi side. And so a lot of things that has been -- has happened during 2024. We have seen the good performance in end of Q4 and we expect the same to continue in 2025. Now with the talks of a fourth license and a fourth operator to get in, talking about having 5G exclusivity, this is we are opposing, us as well as Asiacell. And we are basically in discussions with the regulators and the officials to not allow for, like, 5G exclusivity. It doesn't -- it's not fair for us and it's not fair for also Asiacell. And we might consider legal actions later on if they did not change their stand on this, but if you look at it, once you have a license announced or issued, it takes at least 12 months to be able to operate. So I don't see any issue on 2025. There might be, of course, the risk on 2026, but we will come to that later, okay?

Our next question is from [ Waruna Kumarage ]. It says the -- does the 3% to 5% net income growth guidance for 2025 factored in the Pillar 2 tax impact?

Yes. As I mentioned, the Pillar 2 tax impact is approximately $26 million. This is our first assessment and our guidance factors that in. Without this, it will be more.

And we have a question from Nishit Lakhotia. Nishit, can you hear us?

[indiscernible] a couple of questions. First, on the Sudan operations. Can you give some highlight as to how much dividends or cash have you upstreamed from Sudan during the year? Because, if I recall, you did upstream something this year. So if you can just quantify that. And I also see quite a bit of market share drop in Sudan from third quarter to fourth quarter, so what exactly triggered that in terms of the competitive dynamics? Why are you losing market share, yes, in Sudan in the fourth quarter? So that's on the Sudan, I mean, operations. Second, on the guidance: I'm assuming this guidance is on a normalized net income excluding the one-offs that you have this year when you're talking about the growth that you -- at the net level. So if it is not, then if you can just highlight that. And finally, on the Iraq one, just again carrying on from Maddy's question on the growth. Is there something of -- I mean, in terms of interconnection, there was -- issues on Korek. I'm assuming that's still continuing. And that has really benefited the existing operators, the other operators, so is -- any update on that? Is that, well, wholesale connectivity issues to Korek subscribers still ongoing? And you expect that this kind of growth that you've seen last year is sustainable in this year even if you exclude the competition that might come from the fourth license [ when ever it come ]. That's it.

Thank you. Regarding your first question, the upstreams from Sudan, we managed this year to get approximately $50 million from Sudan in terms of wholesale deals. On the dividend side, we haven't been paid dividends. Actually, central bank asked us, I think, 2023, to basically hold on the dividends that they allowed us to upstream, because of the situation in Sudan. Now regarding the performance of the -- of Sudan, Zain Sudan: The company went through a lot of downsides, especially when it comes to the systems in place and the billing system in place. When we were before that -- and this happened actually in February, March, where we had complete blackout, but before that, we were operational. And we were also working across all the regions where you -- where we can operate in, while Sudatel, the competitor, were not, basically, for most of that time. So they moved all of their disaster recovery or their systems north. And when -- what happened to us, we -- in a record time almost like 1.5 months, we managed to bring back the network, put a billing system in place over the cloud and then worked at the same time on having another billing system and a disaster recovery place in Port Sudan. And we managed to complete all of this towards end of November 2024. Now from a service status, we are providing almost the same services. We are actually providing all the services that Sudatel is providing, and more than MTN. MTN have some issues still in the market. And if I look at the point of sales and the shops that we have in the market that are functional, the -- we have almost double the size of Sudatel in the market. So I believe we, you will see our market share as well as revenue share in Sudan growing significantly higher in 2024 -- in 2025, similar to Q4 of 2024. Regarding Iraq. I think you asked a question about Iraq, Korek. Yes, there is an issue on Korek. The interconnection on the voice side has been disconnected for some time. Now what happened is the regulator also pushed again because they haven't paid still the license fees. So they disconnected the [ leased lines ] on Korek. Now it is beneficial for us as well as Asiacell.

Yes.

But don't forget also Korek. They have connectivities coming from Kurdistan or from Turkey, so they are still operational. This helped us and the regulator. What they have done helped us, of course, but not to the extent that we will take all their customer base on our network, no. It's not the case. And on the fifth -- on the fourth operator, I already gave some highlights.

Yes. I also had a question on that net income growth. It's on normalized income, right...

Yes if you isolate the $80 million.

[Operator Instructions] And the next question comes from [ Ahmed Al Hammadi ].

[indiscernible] on your full year results. I have a question around the auditors' qualified opinion around the hyperinflationary adjustments in Sudan. Could you please provide some color on when should we expect these adjustments to be reflected in your financial statements?

This qualification has been there for like the past 5 years, I believe.

Yes, yes. Correct.

And we are facing a lot of issues in Sudan in 2024, as you know. The absence of clear data is not permitting us to allow -- to basically apply hyperinflation accounting or apply, I mean, IAS 29, so my expectation is that it will be, hopefully, in 2025. We are working closely on this. In 2025, we will be able to apply IAS 29 in Sudan. We are working closely with the auditors on this. And our expectation is it will be in 2025 that we will be applying it. Now -- and once you apply it, I'm sure the qualification will be removed.

Okay, clear.

The impact of this, we still haven't assessed.

And one last chance, in case anyone has any questions, before we wrap up. All right, those are all the questions in the queue, so back to you in case you would like to make any concluding remarks.

Thank you, Omar and EFG Hermes, to -- for hosting today's call. And happy Ramadan mubarak to everyone. Inshallah, we'll see you soon in Q1. Please refer to our investor relation website for additional updates. And feel free to contact our IR team for further information at IR Zain. Looking forward to see you again. Take care, and have a good one. Thank you for joining the call.

Thank you [indiscernible] Zain Group management team. And thank you, everyone, for your participation. This concludes the call. And have a great day. Thank you.