Qatar Telecom Q.S.C. (“Qtel” or “the Qtel Group” or “the Group”) (EPIC: QTEL.QA), is pleased to announce strong Group financial results for the twelve months ended 31 December 2008 and the achievement of the Group’s highest ever annual net profit.
Announcing the results Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani, Chairman of the Qtel Group commented: "The Qtel Group showed consistently strong performance throughout 2008. During the year our Group delivered a significant increase in consolidated revenue and continuing, strong annual profit growth. This growth means that today we are reporting our highest ever net profit figure: a significant achievement. Furthermore, operational progress made in Q4 – particularly in core markets such as Qatar, Oman and Kuwait – ensured that today’s full year results are some of the best in our Group’s history."
“This has been an important year in the Qtel Group’s development, one in which we began to deliver the full benefits of our international positioning to customers, shareholders and the wider communities we serve. We have continued to expand our global footprint, with further acquisitions and strategic partnerships in our target geographies of the Middle East and North Africa, the Subcontinent and Southeast Asia. In particular, our acquisition of a significant stake in Indosat has positioned us for growth in one of the world’s most populous markets. Today, we can proudly state that the Qtel Group’s presence stretches across 17 different countries serving 57.5 million customers."
2008 marks yet another transformational year for the Qtel Group. During the year, aided by our acquisition of Indosat, Indonesia’s second largest telecommunications company, as well as ongoing international development efforts the Group’s presence increased to encompass 17 different countries. Each country where we have operations has a unique set of consumers, each with their own needs and ever-changing patterns of communication. The Group’s management teams’ priority is to understand those needs and patterns and to ensure that the Group’s services and network capabilities move with them. As a result of this focus on innovation and ‘share-of-value,’ consolidated Group revenue this year increased 93 percent to QAR 20.3 billion (FY07: QAR 10.5 billion).
As the Group’s footprint has evolved this year, so has the Group’s revenue mix. Following the consolidation of Indosat’s performance into the Group’s results, Qatar, Indonesia, Kuwait, Iraq and Algeria now represent the Group’s five largest markets by revenue, contributing 27, 21, 15, 14 and 9 percent to Group revenue respectively.
Profitability has grown strongly this year. At the end of 2008, consolidated Group EBITDA stood at QAR 9.8 billion: 90 percent higher than at the end of 2007 (FY07: QAR 5.2 billion). Net profit attributable to shareholders also increased during 2008, closing the year 36 percent higher than in 2007 to stand at QAR 2.3 billion (FY07: QAR 1.7 billion): the Group’s highest ever annual net profit performance.
RESULTS OF MAJOR OPERATIONS
Today, the Qtel Group serves 57.5 million customers and has a presence in 17 different countries. Each of the Group’s operations has continued to make good progress during the year, as outlined below:
The Group’s operations in its home nation of Qatar continue to perform solidly, with the active customer base closing the year at 1.9 million. Revenue at the end of 2008 stood at QAR 5.4 billion (FY07: QAR 4.4 billion), 23 percent higher than at the end of 2007.
To secure its leadership position in Qatar ahead of the expected launch of competition in 2009, Qtel completed the redevelopment of some of its core consumer services in 2008. The popular prepaid GSM service – HALA Pay As You Talk – was redeveloped to offer greater flexibility and a wider range of options, while post-paid services were also repurposed as Shahry – Pay Monthly. These initiatives, both executed in Q4, and a series of upgrades to fixed line and entertainment services helped to drive active customer numbers above 1.9 million by the close of 2008, and secure the highest mobile penetration rate in Qatar’s history.
Indosat, Indonesia’s second largest mobile operator, is the latest addition to the Qtel family. Following the Group’s initial acquisition of a 40.8 percent stake in the operator for a cash consideration of QAR 6.2 billion (USD 1.7 billion) and the subsequent Tender Offer process, successfully completed post-period end, Qtel now holds a 65 percent stake in the company.
During 2008, Indosat further consolidated its strong position in the Indonesian market by adding 12 million customers to its active customer base. This significant achievement means that Indosat now serves over 37 million customers: 28.7 percent of the country’s mobile market. Revenue from these customers in 2008 was QAR 4.2 billion (post-acquisition).
Operating in a promising yet competitive market place, this performance owes much to Indosat’s efforts over the past twelve months to further consolidate its market reputation for excellent coverage, call quality and value. Service innovation has also continued apace during the year. 2008 saw Indosat add to its list of industry ‘firsts’ by becoming the first operator in Indonesia to offer pre-paid wireless broadband services to consumers.
Wataniya Telecom (“National Mobile Telecommunications Company K. S. C.” or “the Company”) covers the Qtel Group’s presence in Kuwait, Tunisia, Algeria, Kingdom of Saudi Arabia, the Maldives and Palestine. During the year, Wataniya continued to deliver strong growth with the Company’s total active customer base increasing by 15 percent in 2008 to 10.9 million customers (2007: 9.5 million). In 2008 the Company generated revenue of QAR 6.5 billion (2007: QAR 4.5 billion - post-acquistion), 44 percent higher than the prior year.
Across its operations, and contributing to the strong growth seen in 2008, Wataniya continued to make improvements this year to its service and product offerings as well as the network infrastructures over which these offerings are delivered. In Kuwait, Wataniya’s largest market, investments were made in upgrading the operator’s nationwide HSDPA network, which is now able to offer an enhanced 7.2Mbit per second service across the country. Similarly, network densification projects were successfully completed this year by Wataniya’s Tunisian business (Tunisiana) and, in an innovative and cost effective partnership with Tunisian rail operator SNCFT, the fibre network was also extended to three new governorates.
In Iraq, the Qtel Group operates under the Asiacell brand. During the year Asiacell’s active customer base has grown by 42 percent to stand at 6.1 million (2007: 4.3 million). Today, in its capacity as the country’s second largest mobile operator by number of customers, Asiacell serves over a third of all Iraqi mobile customers. Revenue from these customers for 2008 stood at QAR 2.8 billion: a significant improvement on the previous year (2007: QAR 732 million - post-acquisition).
This strong performance is owed in part to initiatives completed this year to further extend the reach of the Asiacell network. During 2008, Asiacell commenced operations in two of the country’s largest governorates, Irbil and Dhok, as well as extending the EDGE network to certain key locations across the country. At the same time, Asiacell has also focused considerable effort on bringing the Asiacell experience to new customers through intelligent pricing and targeted marketing campaigns. As evidence of the effectiveness of these initiatives, a six month marketing drive in Baghdad succeeded in growing Asiacell’s customer base in the capital from approximately 1.0m customers to well over 1.8m.
Nawras, the brand under which the Qtel Group operates in Oman, delivered another strong performance this year, closing 2008 with 1.5 million active customers: a 49 percent increase on the previous year (2007: 1.0 million). Commanding 47 percent of the Omani mobile market, Nawras continued to make great strides this year in terms of revenue growth, delivering a 48 percent increase in revenue over 2008 to QAR 1.3 billion (FY07: QAR 893 million).
Strategically, 2008 marked a bold step for Nawras outside of its core mobile communications business. Following a competitive application process, in November 2008, Nawras was selected as the winning applicant for Oman’s second fixed licence. The Company looks forward to rolling out fixed-line services in the year ahead, extending to customers the same commitment to quality and service excellence that Nawras mobile customers already enjoy.
wi-tribe is the cornerstone in Qtel’s strategy to capture key market share of the consumer wireless broadband market in order to develop a strong and resilient regional platform for the distribution of online content. At the close of the year revenue stood at QAR 27 million (2007: QAR 7 million - post-acquisition).
2008 bore witness to a number of key milestones in wi-tribe’s development. The most significant of these was the commercial launch in June of WiMAX services in Amman, Jordan’s capital city. From a standing start, the service has won over almost four thousand customers in its first six months of operation: a third of these customers having migrated from rival services. In May, wi-tribe added to its geographic reach with the purchase of WiMAX spectrum in the Philippines.
Commenting further on the results, Dr. Nasser Marafih, Chief Executive Officer of the Qtel Group added: “One of our most significant achievements in 2008 was that, even as we extended our regional reach, we continued to enhance our profitability. In 2008 we have continued to place great emphasis on profitable growth, and have been successful in maintaining stable EBITDA margins and in delivering a very strong 90 percent increase in EBITDA performance."
"It is particularly pleasing to see that this continued, strong growth has come from both the traditional and newer parts of the Qtel family. Our operations here at home in Qatar have continued to deliver solid growth in 2008, and we enter 2009 confident in our position as competition comes on-stream. Furthermore, our operations in Indonesia, which are the newest addition to our Group, have further consolidated their already strong position. Indosat now commands 28.7 percent of Indonesia’s mobile market: a market that holds great potential for future growth."
“Coupling such strong performance with our distinct internal resources and experience, we continue to aim for strong performance in 2009, even in the face of new competitive pressures.”
The Board of Directors will recommend to the General Assembly a total annual cash dividend of QAR 10 per share. The cash dividend represents 100% of the share face value.
2009 Al Bawaba (www.albawaba.com)
