Qatar Telecom Q.S.C. today announced results for the six-month period ended 30 June 2012.
Earnings per share in 1H 2012 stood at QAR 4.92 (1H 2011: QAR 5.83). Earnings per share for 2011 have been restated as a result of the issuance of 30 percent bonus shares and 40 percent rights issue in 1H 2012.
Qatar, Tunisia, Iraq and Algeria maintained positive momentum from previous quarter.
Indonesia growth accelerated from previous period; Nawras returned to positive customer growth and stable revenue.
Kuwait's results have been negatively impacted by heightened competition during the period.
Net profit for the period was impacted by adverse foreign exchange movement in Indonesia and Algeria. The operational results, excluding foreign exchange impact, showed growth of around 9%.
Successful completion of fully subscribed Qtel Rights Issue, raising QAR 6.8 billion for the Group.
Agreement reached, subject to Iraqi Government and Regulatory Authority approval, to increase Qtel’s shareholding in Asiacell, to 60 percent for a total consideration of QAR 5.4 billion. Initial increase in stake takes shareholding of the group to 53.9%.
Submission of an offer document for approval from the Kuwait Capital Markets Authority, which may lead to an offer for all the issued shares of the Wataniya Telecom Group not already owned by Qtel.
As of 30 June 2012 the Group’s consolidated customer base stood at 83.7 million (1H 2011: 77.5 million), representing an 8 percent year-on-year increase in total customer numbers. Group revenue for 1H 2012 was QAR 16.4 billion (1H 2011: QAR 15.4 billion) with EBITDA for the period QAR 7.8 billion (1H 2011: QAR 7.2 billion) and an EBITDA margin of 48 percent achieved (1H 2011: 47 percent).
Net profit attributable to Qtel shareholders decreased by 11.8 percent with 1H 2012 at QAR 1.4 billion (1H 2011: QAR 1.5 billion). This was mainly due to foreign exchange losses in Indosat and Algeria.
Commenting on the results, His Excellency Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani, Chairman of the Qtel Group said: “We have made good progress in the first half of the year toward our business goals. Our strategic path remains clear. We have continued our strategy to invest in markets where we see growth potential. In Iraq we have set out a way forward to increase our Asiacell stake. The growth strategy was supported through our highly successful Rights Issue, retaining the confidence and trust of our shareholders and securing QAR 6.8 billion in funding.”
Also commenting on the results Dr. Nasser Marafih, Chief Executive Officer of the Qtel Group said: “We saw strong revenue and EBITDA performance for the Group in the first half of the year. In the face of increasing competition, we are fully aware that our success in the near and far term will depend on delivering exceptional service to our customers, a focus on our operations, and from targeted investments in new opportunities. These three principles guide our work as we take the necessary steps to bolster the momentum already underway in some of our operations and retake the initiative in the other operations.”
Review of Operations
The Group’s operational performance can be summarized as follows:
Qtel – Qatar
Qtel continued to distinguish its performance in a competitive marketplace, ending the quarter with 2.43 million customers (1H 2011: 2.38 million). Revenue increased by 7.2 percent year-on-year to stand at QAR 3.1 billion (1H 2011: QAR 2.9 billion). EBITDA performance showed an increase of 5.8 percent year-on-year to QAR 1.64 billion (1H 2011: QAR 1.56 billion).
Qtel Fibre demonstrated strong potential for growth in both the commercial and residential sectors of Qatar, with a number of major agreements concluded with development projects in Qatar and more than 30,000 homes connected by the end of June 2012. The company continued to expand its entertainment and mobile service portfolios, recognising the potential of Qatar’s dynamic economy development.
Indosat – Indonesia
Indosat has made good progress in this first half of the year and is starting to see tangible benefits from the strategy now in place. At the end of 1H 2012, the Indosat subscriber base stood at 51.1 million (1H 2011: 47.6 million), representing a 7.4 percent increase year-on-year. 1H 2012 revenue grew in local currency but due to foreign exchange translation decreased by 2.2% percent in Qatari Riyals to QAR 4.1 billion (1H 2011: QAR 4.2 billion). Depreciation of the Indonesian Rupiah during the year had a significant impact on profitability, but underlying EBITDA continued to be strong at QAR 2.1 billion (1H 2011: QAR 2.0 billion).
Wataniya Telecom (“National Mobile Telecommunications Company K. S. C.”) encompasses the Qtel Group’s businesses in Kuwait, Tunisia, Algeria, the Kingdom of Saudi Arabia, the Maldives and Palestine. Performances in Algeria, Tunisia and Palestine have been encouraging, with strong customer and revenue growth delivered across each of these markets. In Kuwait, however, the Group saw an increase in competition during the second quarter, coupled with a decrease in SMS revenues as customers begin to adopt messaging applications on smartphones. Depreciation of Algerian Dinar during the year also impacted Wataniya Group’s profitability.
These factors have combined to impact Wataniya’s financial performance during the period at a group level. Whilst Wataniya’s consolidated customer base remains strong at 18.3 million (1H 2011: 16.9 million). Consolidated revenue in 1H 2012 was QAR 4.8 billion (1H 2011: QAR 4.6 billion) and EBITDA in 1H 2012 remained stable at QAR 2.0 billion (1H 2011: QAR 2.0 billion).
Nawras – Oman
Nawras saw 1H 2012 revenues stabilize when comparing with 1H 2011 although significant competitive pressures remained. The period also saw a return to customer growth both in the mobile and fixed segments. Nawras closed the period with a customer base of 2.0 million (1H 2011: 1.9 million). Revenue for the period remained stable at QAR 939 million (1H 2011: QAR 954 million), delivering an EBITDA performance in 1H 2012 of QAR 456 million (1H 2011: QAR 466 million).
Asiacell – Iraq
During 1H 2012, the Qtel Group was pleased to reach an agreement on the increase to its shareholding in Asiacell from 30 percent to 53.9 percent. Over time, the Group hopes to increase further its shareholding to 60 percent for a total consideration of USD 1.47 billion subject to Iraqi Government and Regulatory Authority approval.
Against this backdrop, it is encouraging that Asiacell has continued to deliver strong customer and profit growth during the period. This growth has been driven by Asiacell’s strong brand awareness and its reputation for service innovation and quality. During 1H 2012, revenue increased by 17.5 percent to QAR 3.3 billion (1H 2011: QAR 2.8 billion) and EBITDA grew by 19.6 percent to QAR 1.8 billion (1H 2011: QAR 1.5 billion).