Qtel Achieves Nine Month Net Profit Growth of 28 Percent Year on Year to QAR 2.35 Billion

Published October 21st, 2009 - 02:40 GMT

Qatar Telecom Q.S.C. (“Qtel” or “The Qtel Group” or “The Group”) (Ticker: QTEL.QA) today announced solid financial results for the nine month period ending 30 September 2009, as the Group continued to successfully execute to its in-market strategies and generate value across its 17 country footprint.

Financial Highlights:

 

 

 

Q3 2009

Q3 2008

% change

 

9M 2009

9M 2008

% change

 

Consolidated revenue (QAR m)

 

5,941.3

6,197.0

-4%

17,484.7

14,318.7

+22%

EBITDA (QAR m)

 

2,835.9

2,948.4

-4%

8,344.2

6,990.6

+19%

EBITDA margin (%)

 

48%

48%

-

48%

49%

-2%

Net profit attributable to shareholders (QAR m)

 

710.9

654.8

+9%

2,348.8

1,838.6

+28%

 

Operational Highlights:

·         A period of further strong year-on-year growth in revenue, EBITDA and net profit.

·         Quarter-on-quarter revenue and EBITDA performance relatively stable, impacted by Foreign Exchange impact in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Algeria and Tunisia and by ongoing market challenges in Kuwait.

·         Broad-based growth delivered through a continuing focus on product innovation, service excellence and operational efficiency.

·         The Group’s balanced portfolio of operations continues to combine strong cash generation with high growth potential.

 

In the nine months ending 30 September 2009 the Group achieved solid consolidated group revenue of QAR 17.5 billion (9M 2008: QAR 14.3 billion), representing year-on-year growth of 22 percent. Net profit attributable to shareholders for the same period reached QAR 2.3 billion, registering 28 percent year-on-year growth (9M 2008: QAR 1.8 billion). At 30 September 2009 the Group’s consolidated customer base stood at 53.4 million.

EBITDA in the first nine months of 2009 increased by 19 percent over the same period last year, increasing to QAR 8.3 billion (9M 2008: QAR 7.0 billion).  EBITDA margin during the period stood at 48 percent (9M 2008: 49 percent).

Qtel’s focus on product innovation, service excellence and operational efficiency has continued to deliver solid growth across the business during this quarter. Despite a rise in competitive pressures and challenging conditions in some markets, the Group has continued to see customer numbers and revenues increase across its operations, driven by its in-depth understanding of the needs and aspirations of its customers. In particular, a robust strategy within its home market of Qatar has seen Qtel increase its consolidated customer base significantly during the most competitive quarter since the market was opened in H1 2009. Across Group operations, the company continues to see important benefits from sharing and deploying knowledge and leveraging operational experience.

Commenting on the results His Excellency Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani, Chairman of the Qtel Group said: “Following another strong quarter, Qtel has achieved 22 percent revenue growth and 28 percent net profit growth during the first nine months of this financial year. Our success in continuing to develop our business, in the face of increasing competition and international economic challenges, underlines the effectiveness of our strategy for growth and our diligence in pursuing that strategy.

“The international financial community continues to support our goals and demonstrate confidence in our strategic aims and ambitions.   This confidence was reflected in Q3 during the general syndication phase of our recently-launched revolving credit facility, which achieved a 100 percent oversubscription.  As a result, the final facility size was increased from US$1.5 billion to US$2 billion in order to accommodate this high level of interest.  This significant achievement not only lends added credibility to our growth plans but also further strengthens the already robust financial platform we have that will allow our Group to carry these plans forward,” he added. 

The Group continued to make good progress during the period right across its business: a footprint that encompasses 17 countries across the MENA region and Asia.

In Qatar, Qtel customer numbers grew by 39 percent to stand at 2.4 million at 30 September 2009. This impressive growth figure, realized in direct competition with a recent new entrant in its home market was achieved through a strong strategic focus on product innovation across its portfolio, supported by targeted campaigns and renewed attention to customer service, demonstrated by the company’s first-ever ‘Customer Charter.’ The company saw good take-up of new mobile services, and also continued to grow its fixed line and entertainment businesses.

Also commenting on the results Dr. Nasser Marafih, Chief Executive Officer of the Qtel Group said:

“We have continued to realize success across our diverse portfolio because we have remained close to the needs of our customers and because we continue to push for management excellence across our operations. Even though the pace of global economic recovery remains uncertain at this time, our performance so far this year demonstrates that the Qtel Group is well positioned to grow and thrive in the months ahead.”

“Our Group operations continue to work closely together to realize long-term value for our customers and shareholders. This value is being realized through sharing knowledge and experience, and also through practical steps such as collective procurement and internal agreement on interconnections for international traffic,” he added.

Review of Operations

While economic conditions have yet to return to the levels seen twelve months ago, there has been some evidence in Q3 2009 to suggest that conditions have begun to stabilise and, in certain geographies, begun slowly to improve.  Against this backdrop, the Group has remained focused on executing to its long-term in-market strategies and has continued to make operational advances in each of the countries where it has a presence.  The Group’s operational performance can be summarized as follows:

Qtel – Qatar

Qtel Qatar, the Group’s flagship operation in its home market, continued to perform well during the first nine months of 2009. Growth in the mobile customer base contributed to impressive consolidated customer expansion, with mobile customer numbers growing in the first nine months of the year by 44 percent to stand at 2.1 million customers at 30 September 2009.  Revenue grew in the same period to QAR 4.3 billion (9M 2008: QAR 4.0 billion), 9 percent higher on a year-on-year basis.  At the same time, EBITDA over the period increased by 4 percent year-on-year to QAR 2.7 billion (9M 2008: QAR 2.6 billion).

This strong performance owes much to the management team’s keen focus on driving growth through product innovation and maintaining high levels of service, allowing it to continue to lead the field in a market that was opened up to competition in H1 2009.

The company’s enhanced focus on customer service played an important role in reducing churn and enhancing customer loyalty, particularly through key initiatives such as the launch of the company’s first-ever ‘Customer Charter’ in the quarter. The commitments within the Charter have also been supported by ongoing investment in innovative services such as Mobile Self-Service and Interactive Voice Response applications, to make it easier for customers to pay bills and upgrade services.

Qtel has also continued during the third quarter of 2009 with its aggressive campaign of new service and product enhancement launches, such as the release of Mobile Internet Packs for Smartphones and other 3G phones and a range of new promotions for international calling and Roaming that proved enormously popular over the summer months and Eid Al Fitr religious holiday.

Throughout these nine months of impressive growth, Qtel continued to ensure a strong social return for the people of Qatar, leading its largest-ever charitable and community campaign during the Holy Month of Ramadan and expanding its CSR campaign – “For Qatar, Hand in Hand” – to include a wider number of education, social welfare and healthcare initiatives. Its commitment in this area was recognised when the company was named as the winner of the Corporate Social Responsibility (CSR) award at the CEO Middle East Awards in September. 

Indosat – Indonesia

Indosat has continued to build in the third quarter upon the solid progress made in the first half of 2009, focusing on deepening its relationship with the customer base and rolling out a range of higher-value services increasingly demanded by its customers.  The company has also kept pace with the demands on its network, successfully winning additional 3G spectrum in the third quarter of 2009 that will enable it to increase capacity, improve service quality and continue to roll out sought-after wireless broadband services. 

In line with the company’s strategy of indentifying and removing ‘calling card-type’ behaviour in the subscriber base, customer numbers ended the period at 29.3 million (9M 2008: 36.4 million).  Revenue in the nine months to 30 September 2009 was QAR 4.6 billion (9M 2008 post-acquisition: QAR 2.5 billion) and EBITDA at the end of the period was QAR 2.2 billion (9M 2008 post-acquisition: QAR 1.2 billion).

Wataniya Telecom

Wataniya Telecom (“National Mobile Telecommunications Company K.S.C.”) encompasses the Qtel Group’s presence in Kuwait, Tunisia, Algeria, Kingdom of Saudi Arabia, the Maldives and Palestine. 

During the third quarter, Wataniya Telecom has continued to adapt effectively to the changing competitive environments that emerged in some of its markets during the first half of the year.  In line with the Qtel Group’s overall commitment to innovation and service excellence, Wataniya Telecom has responded to these different market dynamics by introducing a new range of attractively priced and innovative products and services tailored to the ever-changing demands of its customer base.  This response has borne fruit, with customer numbers increasing by 17 percent during the first nine months of the year to stand at 12.5 million on 30 September 2009 (9M 2008: 10.7 million).  Revenue in the nine months to 30 September 2009 remained stable at QAR 4.5 billion (9M 2008: QAR 4.8 billion).  EBITDA for the same period stood at QAR 1.8 billion (9M 2008: QAR 2.0 billion).

Nawras - Oman

Nawras has made good progress, delivering continued positive revenue and steady EBITDA results despite Ramadan falling the traditionally slower summer period.  Solid growth in the pre-paid data segment has contributed to growth in the period, with revenue increasing during the first nine months of 2009 by 21 percent to QAR 1.2 billion (9M 2008: QAR 953.1 million).  EBITDA also increased during the period, recording growth of 44 percent to QAR 523.4 million (9M 2008: QAR 364.7 million) whilst customer numbers also advanced, standing 27 percent higher year-on-year at 30 September 2009 at 1.8 million (9M 2008: 1.4 million).  Nawras continues to work towards the implementation of fixed, data and international services in Oman made possible following the award of the Sultanate’s second fixed license in June 2009. 

Asiacell - Iraq

Asiacell has continued to deepen its connection during the period with the people of Iraq, further adding to its customer base in the country as well as starting to recognise the financial benefits of the significant increase in customer numbers achieved in the first half of the year.  In the nine months to 30 September 2009 Asiacell’s customer base grew 33 percent to 7.4 million (9M 2008: 5.6 million).  Similarly, Asiacell delivered growth in both revenue and EBITDA during the period, with revenue increasing by 41 percent to QAR 2.9 billion (9M 2008: QAR 2.0 billion) and EBITDA increasing to QAR 1.5 billion: a 49 percent increase year-on-year (9M 2008: QAR 999.2 million). 

 


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