Zain Kuwait (ZAIN)

Equity Research 11 August 2026 | 10:16AM GST

Zain Kuwait (ZAIN.KW): 2Q26 EBITDA in line; bottom line beat driven by Zain Ventures gain

Zain Kuwait reported 2Q26 results on August 11 pre-market open. Faisal AlAzmeh, CFA | GS view: We expect the results to be taken positively overall by the market. Goldman Sachs International

While revenue was slightly below expectations and EBITDA came in broadly in Roman Reshetnev | line with consensus, reported net income of KD140mn significantly exceeded Goldman Sachs International both GSe (+73%) and consensus (+161%), driven by a US$288mn gain from Zain Fadi Bataineh Ventures’ strategic investments and supporting a 70% yoy 1H26 interim DPS | growth (1H26 interim of 17 fils share, implying an annualized DPS of 42 Goldman Sachs International fils/share and 6.9% yield as of the last close price, assuming flat 2H26 dividend Swarnilee Patra | YoY). Nevertheless, underlying net income, excluding the Ventures gain, came in Goldman Sachs India SPL broadly in line with expectations. We await the conference call today at 1pm KSA / 2pm UAE time to elaborate on the results and outlook in more detail.

2Q26 consolidated Revenues came in at KD568mn (vs. KD569mn in 1Q26), -1%/-3% vs. GSe/Bloomberg consensus, up c.+5% YoY (vs. up c.+6% YoY in 1Q26), supported by performance across international markets including Iraq (+7% YoY) and Jordan (+4% YoY), partially offset by Sudan (-7% YoY in USD terms, impacted by a 40% currency devaluation vs. +34% YoY in 1Q26), a Saudi revenue decline (note Zain KSA already reported 2Q26 results on July 28), and a slight decline in Kuwait revenues.

Consolidated EBITDA stood at KD196mn (vs. KD182mn in 1Q26), +2% vs. GSe / broadly in line with consensus, reflecting a 34.5% EBITDA margin (vs. 32% in 1Q26 and vs. c.33.6% consensus), up 6% YoY (vs. up 7% YoY in 1Q26) and up c.8% QoQ (vs. down c.20% QoQ in 1Q26), with margin expansion primarily supported by KSA, Kuwait, and Iraq.

Reported net income was up 93% YoY (vs. up 33% YoY in 1Q26) to KD140mn (vs. KD80mn in 1Q26), and came c.+73%/c.+161% above GSe/consensus. The company noted Zain Ventures strategic investments recorded gains of US$288mn/KWD89mn (vs. US$123mn/KWD38mn in 1Q26), suggesting that underlying net income came in broadly in line with GSe.

The Board declared an interim dividend of 17 fils/ share for 1H26, up 70% YoY versus the 10 fils/share interim dividend paid for 1H26, implying an annualized DPS of 42 fils/share (6.9%% as of the last close price, assuming flat 2H26 dividend YoY). This also implies a payout of c.33%, broadly in-line with 1H25 payout, i.e. we believe the higher absolute dividend in 2026 reflecting the materially higher net income base driven by the Zain Ventures gain.

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Goldman Sachs Zain Kuwait (ZAIN.KW)

Exhibit 1: Zain Kuwait 2Q26 results checksheet KWDmn 2Q26 2Q26 Actual vs YoY QoQ BBG Actual vs KWDmn 2Q25 1Q26 Estimate Actual GSe %Change %Change Consensus Consensus Revenue 574 568 -1% 541 5% 569 0% 585 -3% Adj. EBITDA 193 196 2% 186 6% 182 8% 197 0% Reported net income 81 140 73% 73 93% 80 75% 54 161% Adj net income (excl. Zain 51 51 0% 67 -23% 42 21% nm nm Ventures gain)

Margins EBITDA 33.6% 34.5% 1.0ppt 34.3% 0.2ppt 31.9% 2.6ppt 33.6% 0.9ppt Reported net income 14.1% 24.6% 10.5ppt 13.4% 11.2ppt 14.0% 10.6ppt 9.2% 15.5ppt Adj net income 8.9% 9.0% 0.1ppt 12.3% -3.3ppt 7.4% 1.6ppt nm nm

Source: Company data, Goldman Sachs Global Investment Research, Bloomberg

Valuation methodology We are Neutral rated on Zain Kuwait. We value the company at 6.0x 2027E EV/EBITDA to derive our 12-month price target of KD0.65. Key risks to our Neutral rating and price target relate to…