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

Hello, and welcome, everyone, to Zain Group's FY 2025 Earnings Call. I'm Madhvendra Singh, Head of Senior and LatAm TMT Research at HSBC. It is my pleasure to welcome the senior management team of Zain Group today who are here to discuss the full year results. I will hand over the call to Mohammad Abdal, who will introduce the panel. After that, we'll have a short presentation followed by a set of FAQs, which I would go through, and then we will open up for questions from the audience. Mohammad Abdal, over to you.

Thank you, Maddy, and welcome, everyone, to Zain's Group Full Year 2025 Earnings Conference Call. I'm joined today with Ossama Matta, Group CFO; and Mohammed Shereef, the Group Head of Finance; and Aram Dehyan, the Group IR Director. In a moment, we'll take you through the IR presentation, which was posted earlier today on our website. And after that, we're happy to answer any questions you may have. During the call, we will be making forward-looking statements, which are predictions, 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. And with that, I will turn over the call to Ossama Matta.

Thank you, Mohammad. Hello, everyone, and welcome to our full year 2025 earnings call and Ramadan Kareem to all. 2025 was a defining year for Zain Group, one that marked exceptional progress and set a new benchmark, reaffirming the strength of our forward strategy. We delivered our highest revenues in 16 years and our strongest net income since 2013. reflecting disciplined execution and diversified growth across every market and business vertical in which we operate. All our markets are driving the momentum on all major KPIs, and we will continue to invest in and foster their trajectory. Our people remain the core engine behind this transformation, executing the strategy with speed and precision, turning strategic priorities into tangible results. Throughout the year, we reinforced our core business, monetizing our heavy investments in 5G expansion, fiber deployment and driving robust B2B momentum through enhanced enterprise capabilities. On the growth verticals, whether it's ZOI, ZainTECH and the fintech, collectively, these verticals generated $743 million for 2025, delivering 67% year-on-year growth and now accounts for around 10% of Zain Group's total revenue. A clear indication that these businesses are moving from adjacent initiatives to material value drivers for the group. Starting with Zain Omantel International, which is ZOI. ZOI our wholesale carrier provider delivered an outstanding performance in 2025, with full year revenue doubling year-on-year to reach $401 million making it the fastest-growing vertical in our portfolio. Operationally, ZOI also achieved a major milestone by entering the top 100 globally ranked IP networks ranking #1 in the Middle East, a remarkable achievement and under 2 years following consolidation. For ZainTECH. ZainTECH also delivered a very strong year, achieving revenue growth of 55% year-on-year, supported by major enterprise wins and sustained demand across cloud, cybersecurity and managed services. Importantly, our collaborative go-to-market model with the Zain OpCos continued to prove highly effective in securing large-scale government and enterprise contracts drive 13% group-wide enterprise revenue growth in 2025. Our fintech business is also growing, reinforcing its position as a key growth engine for the group. Transaction volume increased 24% and revenue increased 28% year-on-year both reflecting strong demand and the scalability of our digital financial service model. During 2025, ZainTECH processed more than $11.5 billion in transaction value. This performance was driven primarily by Tamam in KSA and Zain Cash Jordan continued to deliver solid momentum and expand their customer reach. At the same time, Bede Bahrain and Kuwait are scaling effectively and contributing meaningfully to overall growth. We also saw encouraging early traction from the recent launch of Bede platform in Sudan. Bede is our new brand for the fintech in Bahrain and in Sudan and in Kuwait. Insurtech, we launched Zain Insure in Kuwait, offering the country's first fully start-to-end digital motor insurance application, complementing the device insurance play we have in Kuwait and the insurance broker [ Insure & Secure ] that we acquired a few years ago. Also, we entered a JV agreement in Zain KSA with Prevensure creating a digitally powered platform that offers agile customer insurance solutions. Also, Bahrain and Jordan are actively growing their insurance activities in their respective markets. These Insurtech initiatives reflect Zain's ongoing transformation into becoming a TechCo as it expands its focus and base of activities beyond telecom services and delivering customer first digital solutions that simplify everyday experience. On the tower business and our tower cost strategy, 2025 was a year of major progress. We moved closer to establishing the region's largest independent tower company with Ooredoo Group and TASC towers. By 2025 year-end we secured regulatory approval in Qatar, and we expect the first closing in early 2026. Hopefully, we are aiming for April 2026 to close Ooredoo Qatar. Importantly, a new leadership structure is now in place. Kamil Hilali has been appointed as CEO of TASC Towers. Khamil's strategic experience positions the company to execute the interaction, the integration, interaction and scale effectively. Before moving to our financial performance, I want to highlight the outcome of the EGM, the extraordinary general assembly that was held on December 4, 2025. During the meeting, the shareholders approved the amendments of certain articles of association and endorsed the application of IAS 29 which is the financial reporting in hyperinflationary economy to Zain's operation in Sudan. As we noted in our last call, the implementation of IAS 29 had the following key impacts. It resolved the 10-year long standing audit qualification related to the application of IAS 29 in Sudan. So now you will see our financials, no qualification. It has a positive impact on our full year 2025 results. 2025 reported revenue increased by $119 million as a result of application of IAS 29. Also EBITDA increased by $67 million and it had a positive impact on net income of $50 million. It required us, however, to restate 2024, and we have disclosed the restatement of 2024, where net income was reduced by $294 million from $677 million to $383 million mainly reflecting the impairment losses on assets. These adjustments enhance the quality and transparency of our financial reporting and ensure full alignment with applicable international financial reporting standards. For year 2025, we delivered a very solid financial results. Revenue was up 14% year-over-year, reaching a 16-year high of KWD 2.3 billion, which is equivalent to $7.44 billion. EBITDA grew 11% year-over-year to KWD 780 million, which is equivalent to $2.5 billion, reflecting a healthy EBITDA margin of 34%. Net income for the year more than doubled after restatement of 2024, rising 103% year-over-year, reaching KWD 239 million, which is equivalent to $777 million. If we remove the restatement of 2024, the increase will be 15%. All year 2025 figures have been compared to the restated 2024 results, and this is what you see in our presentation and financial statements. Data revenue continued to be a key growth driver, reaching $2.8 billion, up 13% year-over-year and now representing 37% of consolidated group revenue. And our commitment to shareholder value for the first time in Zain's history, we distributed the full year committed dividend ahead of schedule. Across 2 separate rounds we paid an interim dividend of 10 fils per share in September, and we followed that by the remaining 25 fils in November 2025. With these 2 distributions, we successfully completed the total 35 fils per share in line with our dividend policy, which remains active through 2028. On the CapEx side, in 2025, we continue to invest with discipline to secure our long-term growth trajectory. We increased our CapEx investment by 39%, deploying $1.5 billion, representing 20% of the revenue to advance our network expansion, modernize core technologies and accelerate digital transformation initiatives across the group. 80% of this $1.5 billion was invested in our key markets, Kuwait, KSA and Iraq, which enhance the customer experience and delivered a positive impact on revenues. When we go to the debt side, debt and liquidity profile, Zain continues to generate strong free cash flow, reaching $1.1 billion for the year 2025 representing 15% of revenue as a margin. Our total available liquidity remains robust at $3 billion. Our leverage ratio, which net debt-to-EBITDA stands at approximately 2.2x, while the gearing ratio, which is net debt to equity is at 0.8x, reflecting a very healthy and well managed capital structure. Beyond the financials, I am also pleased to highlight the continued recognition of Zain's leadership in people, sustainability and governance. In 2025, Zain was named the top telecom Employer in MENA by Forbes and in the top 3 MENA employers reflecting the strength of our culture and our ability to attract and retain exceptional talent across the region. We also achieved a major environmental milestone, becoming the only telecom operator in the region to receive a CDP climate change A score in 2025. In parallel, our S&P Global ESG score improved from 54 to 60 coinciding MSCI rating upgrade to A in ESG underscoring the progress we are making in climate action, transparency and responsible governance. These accomplishments reinforce the foundations of our long-term value creation model and the commitment we have to operate responsibly while they're delivering strong results. Closing the full year guidance, and this is my conclusion on this. 2025 has been a year of outstanding performance and strategic progress for Zain Group. Our continued focus on diversifying revenue streams, accelerating digital transformation and driving operational efficiency has firmly positioned Zain as a leading future-ready TechCo in the region. Looking ahead, we expect another strong year in 2026. We anticipate revenue growth of 10% to 15% and with net income also growing between 8% to 10% year-over-year. Our CapEx to revenue ratio is expected to be healthy between 17% to 20%. Before handing it over to Mohammed Shereef, who will walk you through our operational performance in more detail, I would like to express my deepest gratitude to our employees, our customers and our shareholders for their continued commitment and support. I also convey my sincere respect to all investors and analysts, all of you who have been actively engaged in these calls and highlighting the Zain success story. Your trust, partnership and belief in Zain continue to inspire our progress every year. Thank you, and wishing you all a blessed Ramadan. With that, I will hand over to Mohammed Shereef.

Thank you, Ossama. Ramadan Kareem everyone. Let's begin with Zain Kuwait. Zain Kuwait maintained its clear market leadership in 2025, delivering solid financial and operational performance despite a highly competitive environment. As the leading operator in the country, Zain captured a 39% revenue market share, reinforcing its dominant position. Our total customer base reached 2.6 million. The operator invested USD 274 million in CapEx, primarily on 5G advanced expansion of 1,300 towers across the country that enhanced customer experience drove B2B revenue and help to retain key clients. For the full year 2025, revenue grew 4% year-over-year to KWD 386 million, USD 1.3 billion while EBITDA reached KWD 139 million, USD 452 million, reflecting a healthy EBITDA margin of 36%. Net income declined 21% year-over-year to KWD 87 million, USD 282 million, primarily due to the USD 80 million one-off transaction gain from the step-up acquisition of IHS in Q4 '24. Excluding this onetime gain of last year, net income growth would have been 1% year-over-year. Data services continued to be a key growth driver contributing at 36% of total revenue, with data revenue growing 4% year-over-year, underscoring the ongoing shift toward digital adoption and higher-value services. Market leadership was further validated by Zain Kuwait, monitoring the #1 position in the revenue, net income and NPS supported by consistent service quality and network reliabilities. Zain KSA. Moving to Zain KSA, the operation delivered another strong year and reported record all-time high revenue of USD 2.9 billion, a 6% year-over-year increase. EBITDA grew 4% year-over-year to USD 925 million, reflecting an EBITDA margin of 32%. Net income reached USD 161 million, up 1% compared to prior year. Data services contributed to be a key growth -- continued to be a key growth enabled contributing 39% of total revenue with data revenue growing 3% year-over-year. Investments in digital infrastructure, 5G expansion and enhanced customer experience drove revenue. Growth also came from the enterprise segment and adjacent markets including Yaqoot, Tamam and new ventures such as insurance technology, further diversifying revenue. Zain KSA's strong performance enabled the Board to recommend a cash dividend of SAR 0.5 per share for 2025. Moving to Zain Iraq. As a key pillar of the Zain Group family, Zain Iraq delivered a stand-out performance for the full year 2025, reaffirming the company's straight vision and the long-term value of its ongoing infrastructure investments. 2025 revenue reached USD 1.29 billion, marking a 20% year-over-year increase. This growth was fueled by sustained commercial momentum and the successful diversification of Zain Iraq's subsidiaries, next-generation and horizon in addition to an aggressive network expansion and optimized operational efficiencies throughout the year. By year-end, Zain Iraq's customer base grew to 20.9 million, a 6% increase over '24, further commanding its position as the market leader in Iraq. The company's focus on profitability remained sharp with full year EBITDA rising to USD 473 million, maintaining a healthy 37% margin. This operational strength flowed directly to the bottom line as annual net profit surged by 15% year-on-year to reach USD 150 million, reflecting a highly successful and transformative physical year. The CapEx investment of USD $555 million, primarily in network expansion of 1,288 new sites is delivering strong returns. Zain Jordan. Turning to Zain Jordan, 2025 was a year of sustained and balanced growth driven by continued digital transformation and disciplined execution. Our customer base grew 2% year-over-year to reach 4.2 million, while revenue increased 7% to USD 595 million. EBITDA grew 1% to USD 227 million, achieving an EBITDA margin of 38% due to ongoing efficiency efforts. Net income for the year reached USD 75 million, demonstrating resilient performance. Our network investment continues to pay off. With the expansion of 5G and acceleration of fiber rollout, data revenue grew 15% year-over-year and now represents 55% of total revenue, underscoring the strong demand for high-speed connectivity and digital services in the country. Zain Jordan also received strong industrial recognition in 2025, securing awards for the best data center, best 5G expansion and best digital transformation reinforcing its leadership in enterprise solutions and digital execution. Overall, Jordan continues to deliver steady growth, a deeper digitalization and a stronger platform for long-term value creation. Zain Sudan. Moving to Zain Sudan, the operation delivered an exceptional performance in 2025 with recovery accelerating following the stabilization of Khartoum, a key milestone that enabled the full restoration of commercial activities and a strong rebound in business performance. Revenue for the year soared 92% year-over-year to USD 661 million, while EBITDA increased 143% to USD 373 million, achieving an outstanding 56% margin. Net income soared to USD 290 million, reflecting the strength of our operational turnaround. Operational recovery progressed rapidly by restoring 814 sites, throughout the year, bringing the active network to a 90% in safe areas. Our customer base expanded 22% year-over-year to 12.3 million supported by the expanding coverage and service availability. Data revenue more than doubled, up 108% year-over-year and now accounts for 32% of total revenue, highlighting accelerating digital adoption. On the fintech front, our Bede platform continued to scale reaching 821,000 registered users and processing over 110,000 transactions. We are very confident of the growth trajectory in Sudan as a major contributor to the overall Zain Group financials. Finally, Zain Bahrain, the operator generated revenue of USD 219 million, up 7% year-over-year. EBITDA stood at USD 62 million, reflecting an EBITDA margin of 28%. Net income grew 1% to reach USD 16 million. Data revenue grew 5% to represent 46% of total revenue. With that, I will hand over to Mohammad Abdal for Q&A.

Thank you, Mohammad. With that now, we can move to the Q&A session. Maddy, you can take over now.

Yes. So I think we have quite a few events happening during the period. So I thought we should just work through some of them quickly. So we'll start with the Zain Ventures, a lot of interest in that. So the first question I have is on how much capital does Zain Ventures deployed so far? And what is the current performance of that? I mean what is the current valuation of that on the books?

Thank you, Maddy, for the question. Good question. We have deployed approximately $150 million to $156 million. And this is mainly into technology investments. As of end of 2025, the portfolio's net asset value stood at roughly 1.8x the invested capital. And this is based on the latest official valuations available. I hope I answered your question.

Yes, sure. And then there are 3 main assets there, but I think SpaceX is what is driving a lot of interest. So if you could talk about when did you invest in SpaceX and how large was the ticket?

We invested in SpaceX, I believe, in 4 to 5 years ago. And the ticket was approximately $50 million. There were some other rounds, I believe, but we did not participate in it. So probably, there might be some dilution, but not major. But the appreciation in value is impressive for SpaceX. And we are hearing a lot of news about SpaceX what will happen with the SpaceX, with Tesla, with xAI and the IPO that will probably happen in 2026. Also all of this will have value that we will capture in 2026.

So what is the current value the SpaceX stake sits on your books as of the fourth quarter?

[ $800 billion ] was the latest value.

So -- and the value of your stake from $50 million...

We have booked approximately like $80 million.

Okay, revaluation?

Yes.

Okay. So had $800 billion valuation you have booked so far $80 million of gain on the original $50 million investment.

What we have booked is basically the 1.8x basically. But the latest news about SpaceX, we didn't -- we haven't done anything yet because we need formal documentation on this and to see what will happen.

So just to square up on that point, your original investment total was $156 million in the overall Zain Ventures. That is now at 1.8x book value and bulk of that revaluation basically is because of your stake in the SpaceX. Is that correct understanding?

That's correct. Yes.

Okay. Understood. So then the question is on -- in case of a potential IPO or liquidity event for SpaceX and xAI, what will be your strategy?

Well, honestly, this is under active discussion internally. And definitely, it will be a board-level agenda item. Now holding a listed name will expose Zain to a daily market volatility. So we must decide whether to hold it or monetize. This is something that we will leave it to the final decision at that time.

Understood. And in case of -- I think in terms of your process for the booking of the revaluation, you said you need an official confirmation. So typically, that leads to what kind of lag versus the actual event.

Yes, we revalue on a quarterly basis, but we basically mark-to-market based on official capital account statements. And usually, the lag there is like 1 to 3 months of lag public news that we take into consideration. 1 month, sometimes it's 3 months. This has been conservative, Maddy.

Understood. Ossama, very helpful, I think. And then moving on to ZOI, if you could discuss what kind of profitability and margin profile the business has?

Now ZOI is very healthy in terms of revenues. As we mentioned that it has doubled compared to last year in terms of revenues. But also take into consideration, let's say, it's still very early, and we are putting a lot of investments in it and cost in it. Building the submarine cables as well as the [indiscernible] cables in Saudi and in Oman and also in between -- in Jordan. So there is a lot of activity that's coming on ZOI. And at the same time, also managing the international and the roaming -- anything related to international roaming is being managed by them. So a lot of costs that we're incurring now, we will benefit from it in the future. And that's why we would see the margins of ZOI, you cannot compare it to a pure telco. It's completely different. That's why you will see the margins lower. So when you look at the EBITDA margin for ZOI, it's approximately like 10%. Last year, it was 16% because of additional costs that we incurred this year and some provisions for bad debt that we have taken. But other than that, it's a very -- it's a very important asset for us as a group.

And since the business is scaling now, what is your investment size for this year? And do you plan to monetize or how much will be monetized in 2026?

For CapEx, total CapEx?

Yes.

We have spent like $1.5 billion this year of CapEx.

On ZOI, sorry, Ossama.

ZOI, I think there was like approximately $45 million, but we expect to invest more of -- because a lot of these invoices will come due this year. And I think it will be like approximately $400 million.

Do you also plan to...

If you think about this business as you start selling, you start selling capacity, even if you're almost ready to launch, I mean, even if you are not launching the service yet, you start selling this capacity.

And would you consider an IPO for ZOI?

No. We always evaluate strategic options. If we consider bringing in an external capital, this might be a great idea. But anything that we have to do, it has to have a strategic fit, we should have the proper valuation in place. Definitely, the Board has to approve it. And currently, there is no active process now. What we're going to do now is basically focus on the execution, focus on laying these fibers in place and sell them. And we will see later.

Understood. A couple of questions on Zain Saudi. Can EBITDA margin improve in 2026? And what will be the drivers for that?

Our group EBITDA margin is 34%, Saudi is at 31.6%. We want them to improve at least to the group consolidated EBITDA margin. 30% is considered acceptable. But definitely, they are running a lot of cost optimization. And now with the introduction of AI in the processes, I believe we will have more efficiency. Hopefully, we will improve the EBITDA margin a couple percentage points.

And the question on Tamam, what are the main revenue drivers for Tamam today? But I will expand that probably to the wider fintech business of Zain Group, what are the main revenue drivers for Zain Group's other fintech assets?

Tamam, we are having basically it's a micro finance and it is growing on revenues by 18% year-on-year. We have also some digital installment products with merchants that are launched recently. But the main revenue driver is the micro lending. Now recently in Saudi, we have seen an increase in the [ NCL ] related to Tamam and this was because of the more pressure from SAMA from the Central Bank. In Saudi on the NPL loans and the NPL ratios, they wanted to have more aggressive approach on this. So that's why we took more provisions. 2026, we expect to have more products coming for Tamam beyond the micro financing and hopefully, to scale on the digital installments with merchants. So I believe the Tamam will also contribute great results for 2026.

That's good. Then some questions for the group levels in -- if you could give some color around the one-offs you might have had in the fourth quarter and especially below EBITDA line. I mean we understand IAS 29, definitely introduces a lot of variance there. But any other one-offs you can call out for the fourth quarter?

Look, what we did in the fourth quarter so many things; one, there was a lot of -- whether it's IAS 29, we have to book an increase of $50 million to the bottom line. If we look -- if we're going to compare this year with last year, Maddy, we see that there is IAS 29 impact of $50 million. We have investment impact of $98 million. This is coming from the investment income. And we also did some fair valuations for our stake in INWI. This brought an additional $80 million. But what we did also we took $160 million of provisions. And these provisions related to the number range, the KWD 24 million that we won 2 years back, but we had the Court of Cassation they came and said, it has to go to the administrative court and not through the commercial court and they basically rejected the whole ruling. So we have to go again from the beginning now from the first instance of the administrative court. But to be prudent, we took KWD 24 million of provisions related to it. And also some other provisions related to NLST and ZAKAT and to cover the remaining portion we have in a dispute with the partner in Saudi. This is a very long -- very old legal case dispute. So we covered $160 million of provisions. And if I compare between this year and last year and normalize it, our growth will be approximately 40%.

And what will be the clean net income after all this?

For the full year, $710 million.

And that includes the $50 million of the IAS 29 as well?

This is also excluded. Yes, this is basically excluding the $50 million.

Okay, understood. And then we have a lot of questions now coming from the Q&A box, so I will take some of them. And -- but I will start with Thando who has raised his hand. Thando can you unmute your line.

Hopefully, you can hear me. Congratulations on the results. I do have a couple, but I'll ask them sort of one by one. The first one is just on the 2026 guidance. I see revenue growth is much higher than net income. So I wonder if you could just help me understand that in more detail. Just in terms of what net income number are you guys using to provide that growth as well as maybe comment on EBITDA margins that you expect in 2026. Just whether you're expecting some expansion at a group level. And whilst you talk about those margins, can you also comment on Iraq as well as Kuwait where Q4 seems to be low in Iraq in terms of that margin. And then Kuwait seems to be quite high relative to the past several years. So just any comments around margins, please, as well as that net income line.

Right. So the first question was related to the guidance of the group. No, I believe the guidance of the group is fine. I mean having like 10% to 15% increase in revenues, I believe with the kind of situation in Iraq, we are moving -- we are doing great. We did great actually in 2025, but we have seen now some challenges appearing in the market applying 20% sales tax on the services. This will definitely have an impact on the customers' wallet. So we are fighting it now. It's still not clear yet from the Iraqi authorities. As we speak, our team is meeting at the -- with the regulator on this. But that's why we put this range between 10% and 15%. And we also believe that Sudan will continue to grow in 2026. We did not achieve our full potential in Sudan yet. For the bottom line, I believe it's also fair to have it like 10% -- between 8% to 10% even though your revenues will increase by 15%, you will have more expenses, especially it's coming from markets like Iraq and markets where you have also more expenses coming into Sudan. In Iraq, there is increase in cost. And if you look at the margins, you will see the margins not at the level we want it to be, but it is by design because we need to make sure we grab the market with the absence of Coric to operate in Iraq. It is an opportunity actually to be a very aggressive on subscriber acquisition costs or on the marketing side of it. So that's why you will see commission has increased as a percentage in Iraq as well as subscriber acquisition costs. And also the mix of revenues changes the profitability. So whether it's in Kuwait or in Iraq, you will also -- we have introduced also the equipment sales in Kuwait under Zain Max. We will see also the margins is completely different than the telco margin. We're talking about here probably [ 13% ] of the margin. It used to be less than that. We managed to increase it. In Iraq, we are introducing also sales of Samsung products and other products. And you are talking about the margin of 6%, and we're trying to also improve it. So this mix of margin will put some pressure on profitability. That's why you will not increase net income at the same pace.

Okay. That makes sense. Just to confirm then, so you are expecting margin expansion, but again, Iraq will probably -- I mean if I look at the 35% margin you did in Q4, that's the lowest you've guys delivered. I wonder there's no one-off in there. It's just more a change in business mix as well as investments because what I'm trying to -- I'm trying to assess what would be a sustainable margin in 2026 for Iraq, in particular? And then whether the group level you're expecting to expand margins?

I think we need to keep the same margin that we had in 2025 -- for 2026 in Iraq especially with the -- as I mentioned, with the new things that are happening in the market with the sales tax. This sales tax will have a major impact on the wallets of customers. But if Coric is not operational yet, we're going to continue to pay -- to push more the products and pay commissions. And that's why if you compare '24 to '25, you see commissions has increased from 5% to 8.5% approximately. Now the plan is to be more efficient in the market, yes. But now it is not the time now as we speak. The time now is to expand more in the market and push more products. Thank you.

Thanks. So I'll keep on with some questions from Q&A box. A lot of questions around the implementation of IAS 29. So some points, people want to clarify is about -- firstly, does that completely solve your FX translation reserve issue or there's still some more to go. That's the first one. Then secondly, with IAS 29 now implemented how does this directly increase the feasibility and economics of the potential Sudan divestment? And what would be the potential timeline. And what would you do with the proceeds if you do sell Sudan. So that's the second one. And then the third one is on, again, IAS 29 implication. Does it -- is it likely to be significant for 2026 as well? And does your guidance account for that already?

Too many questions on the IAS 29 and it's the most difficult standard to apply. So the question is related to impact of IAS 29 in 2026, right?

Yes. Let me start with that. I will remind the questions to you.

For -- okay, the first one was on the FCTR. On the FCTR, we have a reduced FCTR by applying IAS 29 by approximately KWD 1 billion. We expect to continue to have a positive impact, thus reducing FCTR in 2026. And this will range from $200 million to $300 million, depending on the CPI rate, the uplift that will happen and depending also on the FX rate. So we have put different scenarios with the CPI rate, with the FX rate. FX rate will increase negatively the FCTR. CPI rate will increase positively the FCTR. So we run some simulations and the increase will be between positively thus reducing FCTR between $200 million to $300 million. What is left end of 2025 in the FCTR is approximately KWD 600 million of FCTR of which Sudan has approximately KWD 400 million or KWD 500 million on FCTR. Impact on 2026, as I mentioned, running different scenarios will bring in approximately, also if I'm not mistaken, $80 million of profit. It varies based on the scenarios from $40 million to $80 million. Now are we including this in the guidance? For me, now IAS 29 is as part of our life. So whatever we have included in the guidance, this is it. I mean we believe that it will be approximately 10%. Now if things happen differently with IAS 29, probably will get more, I don't know. Okay.

Clear. And how does that affect your chances of monetizing Sudan and what will you do with the proceeds?

But, honestly, we are looking at Sudan now. It's amazing. It's doing great. The contribution to the group is amazing. We are collecting cash out of it. The company whether we're going to sell now or not sell, I don't think it's -- it is subject to discussion at this stage. We had this discussion at the Board level, but this is when we received before the offer, but I don't think this overstands any -- is valid anymore. Looking at the contribution of Zain Sudan and the EBITDA contribution, the company is doing great, and it's still not at its full potential. So we'll wait and see.

You said you are getting cash out. So can you share how much you have recently upstreamed from Sudan?

We did upstream recently approximately like $50 million.

Nice. And do you expect a similar run rate for 2026 or higher?

No, it should be higher. Definitely, it should be higher.

Then there is a question on Sudan again in terms of site restoration speed seems to have slowed in fourth quarter versus third quarter. So now what percentage of the network is yet to be recovered? And what is the potential time line for full restoration?

By end of Q4, I think we had 2,095 sites on head out of 3,000 sites. Yes, we had 2,095 sites on air out of 3,000 sites. Remember, like we started the year or we ended 2024, we had only 1,200 sites on air. So most of the areas where -- it's been liberated, we are operating. The only areas we have difficulties is towards the West side, which is Darfur. But to operate also there in Darfur, it required a lot of OpEx, it required a lot of cost. That's why if you look at the results of Sudan and the margin, you will see an amazing margin. This margin will definitely not be the same once we have -- once we operate on all of Sudan, and this is also -- this was also the case when South Sudan was part of Sudan. Once South Sudan became a separate operation, the margins in Sudan increased. So what we have now is basically 2,095 sites on air out of 3,000 sites. And we must -- the remaining sites are in the areas of Darfur.

Understood. Some quick ones because we are running out of time now. What's your guidance for 2026 dividend? Are you planning to increase or maintain the same payout ratio? So that's the one. And then the related question with that was why have you not increased the minimum dividend with the new policy given such a strong performance? So that's the question on dividend. And then one question is on the number range issue in Kuwait. Is that common for all telcos or it is specific to Zain?

Yes, let's start with the dividends. The dividends, it will be 35 fils as agreed by -- it's our policy now. If later on, they decide at the Board level or at the AGM to increase it, we can basically support that financially. But while we haven't increased since we have a high performance, we have a lot of investments coming in, especially with ZOI and TASC. And we are also interested in Syria, we are interested in Lebanon. So we have to make sure that we continue to have a healthy financial statements. And, of course, support our shareholders with dividends. For the number range, I think, I don't know, honestly, if this is a -- I think that will be also faced by the other operators. The other operators finished the whole 3 legal courts from the first instance to the Cassation and they got paid for [indiscernible] finished Level 1 and Level 2 appeal, and we got paid. But the Cassation decided that it has to go to the administrative court not commercial Court. Would they come back to them and demand or open a case against them. We don't know. We don't know.

Okay. And very quick one on the Iraq fourth operator. Is there any update there?

Nothing yet. We don't see anything, any movement on this yet. Is it expected to be in 2026? Probably there will be some announcement in 2026. But operationally, I think it might be in 2027.

Understood. Thank you very much. Ossama, I think we have run out of time now. So any remaining questions, maybe you can get back to the questioners directly on those. I'll share those questions with you anyway. So thank you once again for taking the time to speak with us. It was very useful. Thanks.

Thank you, Maddy and HSBC team for hosting the call today. It was very interactive, different than usual. We loved it. Please refer to our Investor Relations website for additional updates, and feel free to contact the IR team for further information at [email protected]. We look forward to your future participation in our Q1 2026 update. Thank you all for joining and Ramadan Kareem and mubarak to everyone.

Thank you Maddy. Thank you all for your trust and belief in Zain. And as I mentioned, this inspired us and we are going continue to progress every year. And all these questions, they only improve us. So thank you so much.

Thank you. We can now close the call.