MIRA INFORM REPORT

 

 

Report No. :

494357

Report Date :

28.02.2018

 

 

 

IDENTIFICATION DETAILS

 

Name :

MOBILE TELECOMMUNICATIONS CO (KSC)

 

 

Registered Office :

Zain Tower Fahed Al Salem Street Al Shuwaikh PO Box  22244 Safat 13083

 

 

Country :

Kuwait

 

 

Financials (as on) :

31.12.2017

 

 

Date of Incorporation :

22.06.1983

 

 

Legal Form :

Kuwaiti Shareholding Company - KSC

 

 

Line of Business :
  • Subject is engaged in the provision of mobile telephone services and paging services as well as numeric, alphanumeric and automatic vehicle location systems (AVLS).
  • Subject is also engaged in the distribution and retail of mobile radio communications, cellular base station and mobile antenna telephone systems, portable phones, microwave radio systems and various other        telecommunication instruments and systems.

 

 

No. of Employees :

1,500

 

 

 

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23rd January 2017)

 

MIRA’s Rating :

A+

 

Credit Rating

Explanation

Rating Comments

A+

Low Risk

Business dealings permissible with low risk of default

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List

 

Country Name

Previous Rating

(30.09.2017)

Current Rating

(31.12.2017)

Kuwait

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderately Low Risk

 

B1

Moderate Risk

 

B2

Moderately High Risk

 

C1

High Risk

 

C2

Very High Risk

 

D

 

 

KUWAIT - ECONOMIC OVERVIEW

 

Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves of about 102 billion barrels - more than 6% of world reserves. Kuwaiti officials plan to increase production to 4 million barrels of oil equivalent per day by 2020. Petroleum accounts for over half of GDP, 92% of export revenues, and 90% of government income.

In 2015, Kuwait, for the first time in 15 years, realized a budget deficit after decades of high oil prices; in 2016, the deficit grew to 16.5% of GDP. Kuwaiti authorities announced cuts to fuel subsidies in August 2016, provoking outrage among the public and National Assembly, and the Amir dissolved the government for the seventh time in ten years. In 2017 the deficit was reduced to 7.2% of GDP, and the government raised $8 billion by issuing international bonds. Despite Kuwait’s dependence on oil, the government has cushioned itself against the impact of lower oil prices, by saving annually at least 10% of government revenue in the Fund for Future Generations.

Kuwait has failed to diversify its economy or bolster the private sector, because of a poor business climate, a large public sector that employs about 74% of citizens, and an acrimonious relationship between the National Assembly and the executive branch that has stymied most economic reforms. The Kuwaiti Government has made little progress on its long-term economic development plan first passed in 2010. While the government planned to spend up to $104 billion over four years to diversify the economy, attract more investment, and boost private sector participation in the economy, many of the projects did not materialize because of an uncertain political situation or delays in awarding contracts. To increase non-oil revenues, the Kuwaiti Government in August 2017 approved draft bills supporting a Gulf Cooperation Council-wide value added tax scheduled to take effect in 2018.

 

Source : CIA

 

SUMMARY

 

Company Name                                    : MOBILE TELECOMMUNICATIONS CO (KSC)

Trading As                                            : ZAIN

Country of Origin                                   : Kuwait

Legal Form                                           : Kuwaiti Shareholding Company - KSC

Registration Date                                  : 22nd June 1983

Chamber Membership Number               : 14638

Issued Capital                                       : KD 432,706,000

Paid up Capital                                     : KD 432,706,000

Total Workforce                                                : 1,500

Activities                                               : Provision of mobile telephone services and paging services

Financial Condition                                : Good

Payments                                             : Regular

Operating Trend                                    : Steady

 

 

 

COMPANY NAME

 

MOBILE TELECOMMUNICATIONS CO (KSC)

 

TRADING AS: ZAIN

 

 

ADDRESS

 

Registered & Physical Address

 

Building                        : Zain Tower

Street               : Fahed Al Salem Street

Area                 : Al Shuwaikh

 

PO Box                        : 22244

 

Town                : Safat 13083

Country             : Kuwait

 

Telephone         : (965) 24842000 / 22467200 / 24644444

Facsimile          : (965) 24837755 / 24839559 / 24611111

Email                : mtcweb@mtc.com.kw / info@zain.com

 

Premises

 

Subject operates from a large suite of offices that are leased and located in the Industrial Area of Safat.

 

Branch Office (s)

 

     Location                                                                                           Description

 

·       Opposite Farwaniya Council, Block 9                                                 Rented sales office

Ardheya

     Tel: (965) 24894881

     Fax: (965) 24894883

 

·       Beside National Bank of Kuwait, Block 20                                          Rented sales office

Jahra

     Tel: (965) 24554890

     Fax: (965) 24551859

 

·       Sultan Center, Ground Floor                                                              Rented sales office

Souk Sharq

       Tel: (965) 22461631

       Fax: (965) 22461632

 

·       Western Gate, Block 7                                                                      Rented sales office

Safat

     Tel: (965) 22403849

     Fax: (965) 22403826

 

·       Al Rayes Street, Block 3                                                                   Rented sales office

Mishref

     Tel: (965) 25390273

     Fax: (965) 25390274

 

·       Muhalab Center, Ground Floor                                                           Rented sales office

Hawalli

     Tel: (965) 22629404

     Fax: (965) 22621575

 

·       Al Addan, Block 1                                                                            Rented sales office

Qurain

     Tel: (965) 25425211

     Fax: (965) 25428779

 

·       Opposite Municipality of Kuwait                                                        Rented sales office

Sabahiya

Tel: (965) 24842000

Fax: (965) 23621934

 

·       Airport Street                                                                                    Rented sales office

Shuwaikh

     Tel: (965) 24815034 / 24644444

     Fax: (965) 24849685

 

·       Kuwait Investment Company Building                                                Rented sales office

Safat

     Tel: (965) 22451815

     Fax: (965) 22451813

 

 

KEY PRINCIPALS

 

     Name                                                                                               Position

 

·       Mohannad Mohammad Abdulmohsen Al Kharafi                                Chairman

 

·       Bader Nasser Al Kharafi                                                                    Vice Chairman

 

·       Ahmed Tahous Al Tahous                                                                 Director

 

·       Talal Bin Said Al Mamari                                                                   Director

 

·       Saud Ahmed Abdulkarim Al Nahari                                                    Director

 

·       Mehdi Mohamed Jawad Abdullah Abduwani                                       Director

 

·       Nigel Kevin Govett                                                                            Director

 

·       Martial Antonie Marcel Caratti                                                            Director

 

·       Scott Gegenheimer                                                                           Chief Executive Officer

 

·       Ossama Matta                                                                                  Chief Financial Officer

 

·       Hisham Allam                                                                                   Chief Technical Officer

 

·       Emre Gurkan                                                                                    Chief Strategy Officer

 

·       Duncan Howard                                                                                Chief Commercial Officer

 

·       Eaman Al Roudhan                                                                           Chief Regulatory Officer

 

 

LEGAL FORM & OWNERS

 

Date of Establishment  : 22nd June 1983

 

Legal Form                  : Kuwaiti Shareholding Company - KSC

 

Chamber Member No.  : 14638

 

Issued Capital              : KD 432,706,000

 

Paid up Capital            : KD 432,706,000

 

Name of Shareholder (s)                                                                       Percentage

 

·       Kuwait Investment Authority                                                                          24.61%

 

·       Group of Oman Telecommunications (Oztel Holdings SPC Ltd)                       21.90%

 

·       Nohoudh Development Trading & Contracting Co                                             5.05%

 

·       Kuwaiti businessmen and private investors                                                    48.44%

 

 

AFFILIATED COMPANIES

 

     Name                                                                                   Country                         Stake Held

 

·       Zain International BV                                                             Netherlands                   100%

 

·       Mobile Telecommunications Company Lebanon                     Lebanon                       100%

 

·       Sudanese Mobile Telephone                                                 Sudan                           100%

 

·       South Sudanese Mobile Telephone                                        South Sudan                 100%

 

·       Kuwaiti Sudanese Holding Company                                     Sudan                           100%

 

·       Al Mouakhah Lil Khadamat Al Logisteih Wa Al Itisalat             Jordan                          99.10%

 

·       Pella Investment Company                                                    Jordan                          96.51%

 

·       Nexgen Advisory Group FZ LLC                                            United Arab Emirates     84.66%

 

·       Atheer Telecom Iraq Limited                                                  Cayman Islands             76.00%

 

·       Al Khatem Telecom Company                                               Iraq                               76.00%

 

·       Zain Bahrain BSC (C)                                                            Bahrain                         54.78%

 

·       Mobile Telecommunications Company                                   Saudi Arabia                 37.04%

 

·       Wana Corporate SA                                                              Morocco                       15.50%

 

 

OPERATIONS

 

Activities: Engaged in the provision of mobile telephone services and paging services as well as numeric,

                  alphanumeric and automatic vehicle location systems (AVLS).

 

                  The company has 24.9 million subscribers.

 

Subject is also engaged in the distribution and retail of mobile radio communications, cellular base station and mobile antenna telephone systems, portable phones, microwave radio systems and various other telecommunication instruments and systems.

 

Brand Names: MOTOROLA and NOKIA

 

Operating Trend: Steady

 

Subject has a workforce of approximately 1,500 employees.

 

 

FINANCIAL DATA

 

Financial highlights provided by local sources are given below:

 

Currency: Kuwaiti Dinars (KD 000’s)

 

Consolidated Balance Sheet                                                     31/12/15            31/12/16            31/12/17

 

Assets

Current assets

Cash and bank balances                                                359,799 208,752 244,398

Trade and other receivables                                           406,581 450,386 455,801

Inventories                                                                    27,593              16,418              34,402

Investment securities at fair value through profit or loss 1,164                964                   778

Non-current assets held for sale                                     -                       -                       7,656

795,137 676,520 743,035

Non-current assets

Investment securities available for sale                           26,598              22,134              16,118

Investments in associates                                              219,902 190,396 188,412

Loans to associates                                                      350,673 381,661 415,759

Property and equipment                                                901,679 798,156 743,586

Intangible assets                                                           1,185,312          1,007,237          911,630

Other assets                                                                 15,880              15,598              15,131

2,700,044          2,415,182          2,290,636

Total Assets                                                                  3,495,181          3,091,702          3,033,671

 

Liabilities and Equity

Current liabilities

Trade and other payables                                              761,758 570,920 515,384

Due to banks                                                                213,310 219,154 199,564

975,068 790,074 714,948

Non-current liabilities

Due to banks                                                                751,569 830,193 670,637

Other non-current liabilities                                             40,454              48,953              38,482

792,023 879,146 709,119

Equity

Attributable to Parent Company's shareholders

Share capital                                                                 432,706 432,706 432,706

Share premium                                                              1,707,164          1,707,164          1,707164

Treasury shares                                                             (567,834)           (567,834)           -

Legal reserve                                                                216,353 216,353 216,353

Foreign currency translation reserve                               (756,643)           (1,100,094)        (1,189,469)

Treasury shares reserve                                                 1,967                1,967                -

Investment fair valuation reserve                                    (1,446)              3,484                3,251

Share of reserves of associates                                     -                       (120)                 (326)

Hedge reserve                                                               (216)                 -                       -

Retained earnings                                                          510,641 571,503 281,919

1,542,692          1,265,129          1,451,598

Non-controlling interests                                                185,398 157,353 158,066

Total equity                                                                   1,728,090          1,422,482          1,609,604

Total Liabilities and Equity                                             3,495,181          3,091,702          3,033,671

 

Consolidated Income Statement

 

Revenue                                                                       1,137,547          1,087,774         1,029,547

Cost of sales                                                                (288,065)           (266,764)           (290,891)

Gross profit                                                                  849,482 821,010 738,656

General and administrative expenses                              (345,677)           (308,174)           (313,964)

Depreciation and amortization                                        (212,751)           (222,307)           (185,050)

Provision for impairment – trade and other receivables    (5,303)              (1,296)              (10,256)

Operating Profit                                                            285,751 289,233 229,386

Interest income                                                              7,243                5,992                27,850

Investment income                                                        (5,863)              (3,925)              781

Share of loss of associates                                           (29,297)            (30,781)            127

Other income/expense                                                   (4,832)              (22,793)            (12,207)

Finance costs                                                               (29,029)            (32,598)            (40,100)

Loss from currency revaluation                                      (22,119)            (42,044)            (32,120)

Provision for impairment loss of property and equipment            -                       -                       (37,826)

Board of Directors" remuneration                                   (275)                 (275)                 (275)

Contribution to Kuwait Foundation for

Advancement of Sciences                                             (715)                 (666)                 (1,100)

National Labour Support Tax and Zakat                          (7,231)              (6,138)              (5,753)

Income tax expenses                                                     (27,515)            (28,051)            (10,400)

Profit from continuing operations                                   166,118 158,735 164,152

           

Local sources consider subject’s financial condition to be Good.

 

 

BANKERS

 

·       National Bank of Kuwait SAK

Ali Awadi Tower

Ahmed Al Jaber Street

PO Box: 95

Safat 13001

Tel: (965) 23981188 / 23981189

     Fax: (965) 23985643

 

 

 

PAYMENT HISTORY

 

Regular

 

 

GENERAL COMMENTS

 

Established in 1983, Mobile Telecommunication Co is a leading mobile telecom operator in Kuwait and the EMEA

region. It operates in Kuwait, Bahrain, Jordan, Iraq, Lebanon, Sudan and 14 Sub-Saharan countries.

 

Subject is involved in the provision of mobile telephone services and paging services as well as numeric, alphanumeric and automatic vehicle location systems (AVLS).

 

On 8th September 2007, subject announced Zain as the new corporate master brand name for the Group (formerly MTC), the leading mobile telecommunications provider in the Middle East and Africa. The company operates under the Zain brand in Kuwait, Jordan, Bahrain and Sudan. In Iraq it is currently known as mtc-atheer, in Lebanon as mtc-touch and in 14 sub-Saharan countries in Africa as Celtel: Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Kenya, Malawi, Madagascar, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia.

 

Please note that the correct name of the subject is “Mobile Telecommunications Co (KSC)” and not “Zain Telecommunication”.

 

The subject and its shareholders/owners have been searched in the following databases; Office of Foreign Assets Control (OFAC), United Nations Security Council Sanctions, Australian Sanctions List, US Consolidated Sanctions List, EU Financial Sanctions List and UK Financial Sanctions List and nothing adverse could be found on the exact names listed within the report.

 

During the course of this investigation nothing detrimental was uncovered regarding subject’s operating history or the manner in which payments are fulfilled. As such the company is considered to be a fair trade risk.

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

INR 64.85

UK Pound

1

INR 90.58

Euro

1

INR 79.97

KWD

1

INR 217.03

 

Note : Above are approximate rates obtained from sources believed to be correct

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

TRU

                                                


 

RATING EXPLANATIONS

 

Credit Rating

Explanation

Rating Comments

A++

Minimum Risk

Business dealings permissible with minimum risk of default

A+

Low Risk

Business dealings permissible with low risk of default

A

Acceptable Risk

Business dealings permissible with moderate risk of default

B

Medium Risk

Business dealings permissible on a regular monitoring basis

C

Medium High Risk

Business dealings permissible preferably on secured basis

D

High Risk

Business dealing not recommended or on secured terms only

NB

New Business

No recommendation can be done due to business in infancy stage

NT

No Trace

No recommendation can be done as the business is not traceable

 

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors are as follows:

 

·         Financial condition covering various ratios

·         Company background and operations size

·         Promoters / Management background

·         Payment record

·         Litigation against the subject

·         Industry scenario / competitor analysis

·         Supplier / Customer / Banker review (wherever available)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.