Ooredoo group revenue falls 2% in 2014

11 Mar 2015

Qatar-based Ooredoo Group has reported that its consolidated revenue for the twelve months ended 31 December 2014 decreased by 2% to QAR33.207 billion (USD9.110 billion), down from QAR33.851 billion posted in FY 2013 as it highlighted strong financial performance in Qatar, Oman and Algeria, offset by challenging market conditions in Iraq, Kuwait, Tunisia and Indonesia. Group annual EBITDA fell by 11.6% to QAR12.948 billion (FY13: QAR14.640 billion) with EBITDA margin decreasing by four percentage points to 39% largely due to ongoing strategic investments across the Ooredoo international footprint in broadband networks, customer acquisition/retention efforts and global rebranding (as the Ooredoo brand has now been adopted by seven operators in Qatar, Algeria, Maldives, Tunisia, Myanmar, Kuwait and Oman). Other factors affecting EBITDA were identified as: aggressive price competition in Iraq, Myanmar start-up costs, Indonesian currency depreciation and the Iraqi security situation. Excluding the impact of Indonesian foreign exchange (FX), Myanmar start-up costs and one-off customer acquisition costs in Algeria, EBITDA would have decreased by 5% compared to the reported 12% reduction. Consolidated net profit attributable to Ooredoo shareholders for 2014 was QAR2.134 billion, down from QAR2.579 billion in 2013. As of 31 December 2014, Ooredoo Group’s consolidated customer base stood at 107 million, up by 12% from 96 million reported at end-2013, driven by the Indonesian, Iraqi, Kuwaiti, Myanmar and Algerian markets.

FY 2014 data revenue represented 25% of total group turnover due to Ooredoo’s strategy to increase smartphone penetration and focus on bundles and data offers, plus the expansion of 3G/4G mobile networks, with LTE infrastructure now deployed across five out of the group’s ten cellular markets. Algeria, Iraq, Qatar and Tunisia are all markets where Ooredoo claims to be the market leader in data customer share. The Qatari firm also reported that it generated more than QAR4.5 billion in business-to-business (B2B) revenues in 2014 as its B2B customers increased by 25% during the year.

Ooredoo Qatar posted an 8% rise in annual revenue to QAR7.148 billion (FY 2013: QAR6.590 billion) on 10% customer growth to 3.2 million, driven by mobile services, broadband, ‘mega-projects’ and device sales. Qatari-only EBITDA increased by 5% to QAR3.448 in FY14 and domestic net profit jumped 40% to QAR1.919 billion due to the higher EBITDA and sale of investments.

Ooredoo Myanmar launched its mobile services in August 2014 and by the end of the year had 2.2 million customers, with more than 80% of those using smartphones according to the parent company’s report, over a network covering more than 25 million people in all main cities and half of all townships in the country. Ooredoo Myanmar generated revenue of QAR189 million and EBITDA losses of QAR357 million in the year under review, while net loss stood at QAR531 million. The Ooredoo Business Myanmar division was also launched in the year to deliver products and services to Myanmar’s burgeoning commercial sector.

Ooredoo’s Iraqi mobile subsidiary Asiacell grew its customer base by 15% year-on-year to 12.3 million at end-December 2014, up from 10.7 million at end-2013, helped by network coverage/quality investments made during the year. Asiacell faced the challenge of the growing security issue in the country during the year, in addition to the heightened levels of competition in the market. Consequently, revenue for FY 2014 was QAR6.298 billion, a decrease of 11% from 2013’s figure of QAR7.071 billion, while EBITDA fell 19% to QAR2.939 billion and EBITDA margin dropped by four percentage points to 47%. Asiacell secured a 3G licence in December 2014 and launched 3G services in January 2015.

Ooredoo’s Indonesian division Indosat’s revenue decreased by 12% to QAR7.395 billion in 2014 (FY13: 8.371 billion) due to FX impact. Revenue in local currency was up 1%, driven by the growth in wireless revenues as Indosat launched a range of new data services and bundles. Digital content also delivered strong growth during 2014. EBITDA decreased by 15% to QAR3.279 billion (FY13: QAR3.862 billion) due to FX impact, increased costs of sales and operational expenditure. In local currency terms EBITDA decreased by 3%. Net loss for the period was QAR564 million (2013: loss of QAR850 million), impacted by FX as well as a one-off provision for a legal court case. Faster networks including a new UMTS-900 platform drove growth of Indosat’s data ARPU, and supported customer growth from 60 million at end-2013 to 63 million by 31 December 2014.

Elsewhere this week, Ooredoo joined the SEA-ME-WE-5 international submarine cable consortium, which will launch a new high speed undersea route linking the Middle East with South East Asia and Western Europe in 2016. The SEA-ME-WE-5 landing station in Qatar will be managed by Ooredoo Global Services (OGS). Ooredoo is also part of the AAE-1 consortium cable linking Asia, Africa and Europe (also ready for service in 2016).

Iraq, Myanmar, Qatar, Asiacell, Indosat Ooredoo (incl. IM2), Ooredoo Algeria, Ooredoo Group, Ooredoo Myanmar, Ooredoo Qatar