Ooredoo Q.S.C. announced results for three months ended 31 March 2014.
Earnings per share for the first quarter 2014 stood at QR2.77 (Q1 2013: QR2.52) Overview:
- Strong customer growth of 6.3% to 96.7 million as Ooredoo captures a growing share of our markets by offering leading-edge telecoms services delivered across world-leading broadband networks
- Group revenue decreased 3.4% due to the challenging operating environment and depreciation of the Indonesian Rupiah compared to first quarter 2013; partially offset by strong growth in data revenue
- Robust results in Qatar, Oman and Algeria during the quarter; operating environment remains tough with persistent price competition in Iraq, Kuwait and Indonesia
- EBITDA reduced by 8.5% to QR3,378m reflecting the current competitive challenges in our markets, FX impact and the investment in a new network in Myanmar
- Net profit for the first quarter increased by 9.7% driven by positive FX trends in Indonesia during Q1 2014
- Ooredoo subsidiary Wataniya Group completed the divestment of Bravo to STC in January. Bravo operates a “Push to Talk” technology-based business which is not core to Ooredoo Group’s technology platform strategy
- Post period: On April 22 Ooredoo and Rocket Internet announced a strategic partnership to develop online businesses in Asia. eCommerce is a significant growth opportunity in the region adjacent to our traditional core business
Commenting on the results, His Excellency Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani, Chairman of Ooredoo said: “Ooredoo has produced satisfactory results for the first quarter of 2014. Whilst our markets and our opportunities continue to grow, competition also continues to intensify. However, the trends we are seeing across our markets demonstrate that our investment into delivering the best customer experience is a positive strategy. We continue to believe that communication technology can transform people’s lives, and that is what we intend to do across our global footprint as we invest in building mobile broadband networks.”
Also commenting on the results Dr. Nasser Marafih, Group Chief Executive Officer of Ooredoo said: “Ooredoo’s revenue in the first quarter of 2014 was driven by the increase in mobile and fixed data revenues across our markets. As we continue to invest in our broadband networks, Ooredoo is increasingly becoming a data-centric business which opens up a huge range of opportunity. We are starting to see the results of our strategy with the positive performances of markets such as Qatar, Oman, and Algeria where we have invested in deepening and expanding our network capability with positive results. Ooredoo’s ability to offer world-leading broadband products and services in a growing number of its markets drove our customer numbers up by 6.3% to 96.7 million as we capture a growing share of the market. The market, and its associated opportunities, continues to grow as does the level of competitiveness. However, with the investment that we are making we are building a business that will deliver long-term value to customers and shareholders.”
Review of Operations
The Group’s operational performance can be summarized as follows:
Ooredoo – Qatar
Qatar delivered solid results during the quarter, with revenue growing by 8.3% year-on-year to QR1,706m (Q1 2013: QR1,575m) and a consolidated customer base of 2.9 million. EBITDA performance showed a heathly increase of 7.4% year-on-year to QR828m.
As Ooredoo Qatar seeks to make the country one of the best-connected in the world, the company saw several key broadband milestones during the quarter. Ooredoo Qatar reached nationwide coverage of the first and fastest 4G LTE network, with its 500th LTE site.
The #OoredooSmart campaign, which provides more data and value for customers, has seen strong success. Ooredoo Qatar has also taken the lead on corporate cybersecurity and disaster recovery services, and has enhanced the viewing experience for the beIN SPORTS channel in line with Ooredoo’s #Koora campaign.
Indosat – Indonesia
Net profit for the first quarter was QR261m (Q1 2013: QR17m). Indosat’s net income was partly driven by the sale of its 5% stake in the TBIG tower business and the positive impact of foreign currency as the Indonesian Rupiah appreciated against the US Dollar. Indosat faced an intensely competitive market place during the quarter resulting in revenue loss when compared to the first quarter of 2013 as Indosat concentrated on managing its profitability levels. Indosat continued to invest heavily in rolling out its broadband network, bringing Ooredoo’s world-leading data-based products and services to a greater percentage of the population. EBITDA decreased due to the increased cost of sales and operational expenditure. At 31 March 2014, Indosat’s consolidated customer base stood at 59.8 million (Q1 2013: 56.1 million). Revenue for the three months to 31 March 2014 decreased by 18.2% year-on-year to QR1,780m (Q1 2013: QR2,175m) and EBITDA decreased by 18.4% year-on-year to stand at QR851m (Q1 2013: QR1,044m). The revenue and EBITDA in local currency terms were almost on par with last year.
Wataniya Telecom (“National Mobile Telecommunications Company K.S.C.”) encompasses the Ooredoo Group’s businesses in Kuwait, Tunisia, Algeria, the Maldives and Palestine. Wataniya Telecom released first quarter 2014 financial results on 22 April 2014.
Revenue for the first three months 2014 was QR2,358m: a year-on-year increase of 1.0 % (Q1 2013: QR2,334m) while EBITDA stood at QR862m (Q1 2013: QR911m). The total customer base increased to 20.5 million for the year, an increase of 5% (Q1 2013: 19.5 million). Net profit for Wataniya Telecom for the first quarter of 2014 was QR315m, a decrease of 10.2% compared to Q1 2013.
Ooredoo Algeria continues to perform strongly as it benefits from its re-brand to the global Ooredoo brand and the rapid roll-out of its 3G offering in Algeria. Ooredoo Algeria’s revenues increased by 19.2% to QR1,104m (Q1 2013: 926 million). EBITDA also increased to QR427m, 15% higher than 2013 (Q1 2013: 371 million). Ooredoo Algeria’s customer base increased by 7.4% to 9.93 million compared to the first quarter of 2013.
Wataniya Kuwait began to see the initial success of its recovery strategy as it gained market share, increasing its customer base by 12.1% to 2.22 million compared to the first quarter of 2013. The investment by the business in its network infrastructure, sales, marketing and customer experience initiatives means that Wataniya has the most advanced network in Kuwait and has a clear advantage to market in the face of the intensely competitive nature of Kuwait’s telecoms market. Revenues for Q1 2014 were QR541m (Q1 2013: QR678m), EBITDA was QR126m (Q1 2013: QR217m) and net profit was QR37.2m (Q1 2013: net profit of QR122m), reflecting the strategic investment being made by Ooredoo into ensuring Wataniya Kuwait becomes a key force in the market.
Tunisiana continued to face the challenge of Tunisia’s political and economic instability although the business produced relatively stable revenue and EBITDA for the first quarter at QR586m (Q1 2013: QR613m) and QR289m (Q1 2013: QR309m) respectively. Tunisiana continued to focus on cost containment during the quarter. Customers increased by 2% to 7.41 million when compared to the first quarter of 2013. Net profit decreased by 20.4% to QR99.2m (Q1 2013: QR125m). The current political and economic instability has affected roaming traffic although data revenue and traffic is now growing at an accelerated rate. Tunisiana made good initial progress with the launch of its converged offering for the enterprise market during the quarter.
Wataniya Palestine grew its revenue by 4.5% to QR77.5m (Q1 2013: QR74.2m) and increased its customer base by 5% to 649,260 (Q1 2013: 619,648). EBITDA grew significantly from QR4.5m to QR10.4m as the business continues preparation for a commercial launch in Gaza.
Ooredoo Maldives grew its customer base by 37% to 256,955 compared to the first quarter 2013. Both revenue and EBITDA increased, 16.6% and 17.4% respectively to QR49.9m and QR16.8m.
Nawras – Oman
Nawras’s programme of network investment delivered revenue growth during the quarter, driven by mobile and fixed data revenues. Revenue increased by 9.3% compared to Q1 2013, offset partially by a decline in SMS revenue. EBITDA also increased by 17.8% to QR258m compared to Q1 2013 due to revenue growth and lower cost of sales partially offset by higher operational expenditure. Net profit increased by 15.5% to QR83.7m compared to the first quarter 2013. Total customers grew by 8.9% compared to Q1 2013 to 2.4 million driven by the demand for broadband and data services offered by Nawras’ market-leading broadband network. The Omani telecoms market continues to grow although it remains highly competitive.
Nawras released its first quarter 2014 financial results on 29 April 2014.
Asiacell continued to face increasing levels of competition in Iraq. Consequently, revenue for the first quarter was QR1,618m (Q1 2013: QR1,730m), a decrease of 6.4%; EBITDA was down by 15.1% to QR764m and EBITDA margin was also down to 47%. Asiacell focused on a number of cost efficiencies during the quarter in the face of growing competition whilst continuing its roll-out programme of network modernisation to ensure Asiacell customers continue to benefit from Iraq’s best and most reliable network. Asiacell’s customer base increased by 4.4% to 10.8 million compared to the first quarter of 2013.
Ooredoo Myanmar continued its preparations to launch services in Myanmar following the official award of its licence by the Myanmar government in February 2014. Ooredoo Myanmar plans to launch its 3G+ network by the third quarter of 2014 in Mandalay, Nay Pyi Taw and Yangon and within five years will provide voice and data services to 97% of the population.
Ooredoo will publish its first quarter 2014 financial statements on its website.
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