(MENAFN- The Peninsula) The Peninsula
Doha, Qatar: Ooredoo Q.P.S.C. (“Ooredoo”) yesterday announced its financial results for the six-month period ended June 30, 2023. In the first half (H1) of 2023, revenue recorded a 3% growth, reaching QR11.4bn compared to QR11.1bn in the same period of the previous year. All the revenue segments recorded growth.
A solid net profit of QR1.8bn, compared to QR1.5bn in H1 2022 was reported, marking a 20% expansion YoY.
Similarly, normalized net profit, which takes into account various adjustments such as the foreign exchange impact, impairment, and two one-off items (QR446m gain from the NMTC legal case and QR56m gains from Indonesian tower sales), grew by 20% YoY to reach QR1.6bn, compared to QR1.4bn in H1 2022. These strong growth figures reflect the Group's continued focus on profitability and the effective management of its operations.
In H1 2023, EBITDA remained stable at QR4.8bn, with a corresponding EBITDA margin of 42%, benefiting from strong topline growth. Solid EBITDA improvement in Iraq, Kuwait and Algeria were offset by a decrease in Qatar, Tunisia, Myanmar and Oman's EBITDA.
Ooredoo Group's CAPEX reached QR873m in H1 2023, decreasing by 10% compared to the same period last year. Notably, CAPEX expenditure for the period highlights the strategic investments made in the countries to drive growth and enhance our operations. CAPEX is expected to ramp up in the second half of the year.
Commenting on the results, Sheikh Faisal bin Thani Al Thani, Chairman of Ooredoo, said:“Ooredoo Group concluded the first half of 2023 with an outstanding performance, recording revenue of QR11.4bn and a remarkable surge in normalized Net Profit reaching QR1.6bn. These impressive achievements underscore our steadfast dedication to providing robust connectivity, exceptional customer experiences, and maximizing value for our stakeholders.
Our digital transformation strategy has played a pivotal role in driving our success, empowering us to effectively capitalize on market opportunities and position ourselves for future growth. Our ability to remain agile and adapt to the rapidly changing market landscape positions us strongly for further progress and attractive returns.
Looking ahead, we remain committed to exploring strategic avenues that unlock significant capital and maximize value for our stakeholders, further solidifying our position as a leader in the industry.”
Also commenting on the results, Aziz Aluthman Fakhroo, Managing Director and CEO of Ooredoo said:
“These strong set of results validates our strategy which places operational excellence, and customer service at its core. Notably, our normalized net profit increased 26% in Q2 YoY, and we remain on track to achieve our guidance targets for 2023.
We are proud of our employees. Their dedication contributed to the positive performance of our operations. Ooredoo Kuwait delivered a solid 4% YoY growth in Revenue reaching almost QR1.5bn. Asiacell achieved strong Revenue growth in H1 2023, with a YoY increase of 16%, reaching more than QR2bn. In addition, Ooredoo Algeria delivered an 8% increase in Revenue during H1 2023.
We are making significant progress on executing our strategy and are well on track to achieve our guidance targets. We continue to strengthen our position as a leading telecommunications company striving to deliver competitive services to our customers and exceptional value to our stakeholders.”
In H1 2023, normalized free cash flow showed a notable increase of 7% YoY (up by 17% in Q2), reaching QR3.9bn, driven by a higher normalized EBITDA and a lower CAPEX spend. Qatar, Iraq, Kuwait, Oman, and Algeria contributed to the Free Cash Flow generated during the period, highlighting the strong financial performance and cash generation capabilities of these markets.
Ooredoo Group maintained a robust investment grade rating in H1 2023, with a Net Debt/EBITDA ratio of 1.1x, which is well below the board's guidance range of 1.5x to 2.5x. Furthermore, the Group's financial position is protected from interest rate risks, as approximately 94% of the debt is fixed rate, and the company has sufficient cash balances to cover the floating rate portion of debt. Additionally, the company's liquidity remains strong, with QR8,652m in cash reserves and QR4,636m available in undrawn facilities.
The Group's consolidated customer base reached 56.2 million, representing a 3% YoY growth compared to 54.8 million in the same period last year. H1 2023 saw strong customer growth across all operations, except for Qatar. Including IOH, we recorded 156.2 million customers, up 3%.
Ooredoo Group is making steady progress towards achieving its 2023 targets. The revenue target is expected to remain stable, while the EBITDA margin is projected to be in the low 40% range. Additionally, the planned CAPEX for the year will increase in the second half of the year to reach approximately QR3bn.
Ooredoo Group witnessed notable developments across its OpCos during the quarter. Ooredoo Kuwait received the prestigious Asian Telecom Awards 2023 for Best Application and Best Website of the Year in Kuwait.
Ooredoo Palestine Dr. Samer Fares assumed the position of the new Chief Executive Officer, effective from 15 May. Ooredoo Algeria continued its network densification efforts to enhance customer satisfaction in terms of coverage and experience. The company has achieved a total of 6,556 sites.
The customer base of Ooredoo Qatar reached 3 million, representing a 7% decrease compared to the previous year due to a change in definition of the prepaid base to 90-day active from 365-day. On a like-for-like basis, customers were up 1%.
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Ooredoo Qatar has been at the forefront of sustainability initiatives, partnering with Seashore Group to implement a recycling programme for unwanted mobile devices and received an award for Best CSR initiatives in ICT sector at the Qatar CSR Summit Awards 2023.
In a highly competitive backdrop, Ooredoo Oman achieved a revenue of QR1,230m, up 1% YoY, supported by higher device sales, ICT/IOT revenue and higher postpaid, partially offset by decline in prepaid and fixed revenue. EBITDA declined 10% YoY amounting to QR588m, impacted by a lower gross margin and higher OPEX. There is an ongoing evaluation of the cost structure to improve efficiency in the operation. The customer base saw a significant expansion recording a solid 6% YoY growth to reach 3.1 million.
Ooredoo Oman's commitment to digitalization and technological advancement, a core aspect of the overall strategy, was recognized this quarter as Ooredoo Oman wins the 'Most Innovative Digitally Transformed Telecom Company' award at the Global Business Outlook Awards.
Ooredoo Kuwait delivered a solid performance in H1 2023, with revenue reaching QR1,460m, marking a 4% YoY growth. Furthermore, the company achieved a notable 7% increase in EBITDA YoY, resulting in an EBITDA margin of 31%. This success can be attributed to strong revenue growth.
The customer base of Ooredoo Kuwait experienced significant growth, expanding by 7% YoY to reach a total of 2.8 million customers. This growth has been benefitting from improved economic conditions.
During the period, Ooredoo Kuwait made significant progress on digitalization initiatives. It successfully launched a new strategic approach to onboard SIM sales through partners and community forums. Additionally, Ooredoo Kuwait introduced an innovative and fully automated digital sales platform, a first among the OpCos.
Asiacell – Iraq: Asiacell achieved very solid revenue growth in H1 2023, with a YoY increase of 16%, reaching a total of QR2,024m. This growth can be attributed to the increase in data revenue.
Increase in EBITDA of 23% YoY, benefitting from strong top line growth. Despite the higher leased line and energy costs, the operation delivered a strong EBITDA margin of 46% for H1.
The customer base of Asiacell experienced a notable YoY increase of 5% in H1 2023, reaching a total of 17.1 million customers. This growth is a result of the company's enhanced focus on improving the customer experience and retention efforts.
In H1 2023, Ooredoo Palestine recorded a total revenue of QR203m, recording a 3% decrease compared to the previous year. The decrease can be attributed to the functional currency depreciation against the dollar, with a depreciation rate of 9%.
Positively, EBITDA displayed a 5% YoY increase, reaching QR82m. This growth was driven by disciplined cost control measures, contributing to a strong EBITDA margin of 41% compared to 37% for the same period last year.
Ooredoo Algeria revenue increased by 3% in local currency (LC) YoY, data bundle extension led to higher revenue. The strong appreciation of the Algerian Dinar contributed to the 8% YoY increase in reported revenue. The operation achieved a strong EBITDA margin of 40% in H1 2023, up 3.1pp YoY demonstrating the company's emphasis on implementing effective cost control measures.
In H1 2023, Ooredoo Tunisia reported Revenues of QAR 707 million, a 5% decline YoY. The strong fixed revenue performance was offset by softer mobile service revenue performance in line with the country's mobile market trends.
EBITDA for the same period experienced a decrease of 21% YoY in LC terms, impacted by pressure on the topline and exceptional bad debt recognized in Q1. Excluding those doubtful receivables provisions, H1 EBITDA margin stood at 40%.
The merger between Indosat Ooredoo and 3 Indonesia, forming Indosat Ooredoo Hutchison (IOH), has completed a successful year since its official establishment on January 4, 2022. This strategic partnership has surpassed expectations, positioning IOH as a joint venture rather than a subsidiary. Consequently, Ooredoo Group now attributes only a 33% share of IOH's profits to its EBITDA.
During the first half of 2023, Ooredoo Maldives delivered positive results, with a YoY Revenue increase of 7% to QR240m. This performance was driven by growth in mobile and fixed segments.
Moreover, EBITDA marked a strong YoY growth of 8%, reaching QR133m, fueled by higher Revenue generation, resulting in a healthy EBITDA margin of 55%. Maldives customer base reached almost 400k, expanding by 6% YoY.
Ooredoo Maldives made significant strides during the quarter by expanding services and introducing exciting offers. The company conducted Ooredoo Business Connects events, expanded its SuperNet broadband network to four new islands, and offered special discounts for Hajj travelers.
Ooredoo Myanmar showed a resilient performance by achieving a 4% YoY revenue growth in local currency during H1 2023, despite facing a challenging business environment marked by internet service shutdowns in Upper Myanmar, high inflation rates, currency depreciation and devastation caused by the Mocha cyclone.