February 24, 2024

Ooredoo posts record net profit of QR3 bn in 2023

Ooredoo on Monday announced that its net profit increased 28 percent to a record high of QR3 billion in 2023 compared to QR2.4 billion in 2022. Normalised net profit grew by 16 percent YoY to reach QR3.3 billion compared to QR2.8 billion in 2022.

Commenting on the results, Ooredoo Chairman Sheikh Faisal Bin Thani Al Thani said, “Ooredoo strives to enhance people’s digital lives and deliver value to its stakeholders. In 2023, we continued to provide best-in-class connectivity and deliver superior customer experience by investing in our capabilities and infrastructure. Revenue grew by 2 percent to QR23.2 billion while reported net profit increased by a healthy 28 percent to QR3 billion, a historical high. I am pleased to announce that the Board of Directors will recommend a cash dividend distribution of QR0.55 per share, in line with our sustainable and progressive dividend policy, at the Annual General Meeting in March.”

Sheikh Faisal said, “Our success is facilitated by our ongoing digital transformation, which contributes to our resilience and empowers us to capitalize on market opportunities and position ourselves for long-term sustainable growth. Our adaptability in navigating a dynamic market landscape ensures sustained success and attractive returns. Looking forward, we remain dedicated to our strategic path that unlocks capital and enhances value for our stakeholders, solidifying our position as an industry leader.”

Also commenting on the results, Ooredoo Group Managing Director and CEO Aziz Aluthman Fakhroo said, “The year 2023 was noteworthy. We improved our financial position and made substantial progress against our strategic priorities. We delivered financial results in line with our full-year 2023 guidance. Revenue grew by 2 percent to QR23.2 billion. EBITDA increased by 4 percent to QR 9.7 billion and the EBITDA margin expanded by 1pp to 42 percent, supported by topline growth and a disciplined approach to costs.

“The growth for the year was driven by solid performances in Iraq, Kuwait, Algeria, and Maldives. The Group achieved an all-time high reported net profit of QR3 billion, up by 28 percent, and strong normalised FCF generation of QR6.8 billion, up 6 percent.”

“We announced the establishment of the region’s largest independent tower company in partnership with Zain and TASC at a $2.2 billion valuation, marking a significant milestone. These accomplishments are the result of teamwork, and I am immensely proud of my colleagues’ dedication.

As we look ahead, we will continue to drive operational efficiency for profitability and cash generation while advancing our strategic priorities as we evolve toward becoming the leading digital infrastructure provider in the region,” Fakhroo said.

Revenue grew ahead of the FY 23 guidance target with an increase of 2 percent YoY to QR23.2 billion compared to QR22.7 billion in 2022 driven by sustained growth in Iraq, Algeria, Kuwait, and Maldives. This was partially offset by a decline in Revenue in Qatar, Tunisia as well as in Myanmar and Palestine due to foreign exchange depreciation.

Ooredoo’s focus on profitability led to an EBITDA of QR9.7 billion, up by 4 percent YoY. EBITDA margin expanded by 1pp to 42 percent thanks to healthy service revenue growth and disciplined approach to cost control.

The strong profitability improvement in Iraq, Algeria, and Kuwait was partially offset by lower EBITDA in Qatar, Oman, and Tunisia.

Normalised free cash flow increased by 6 percent YoY to QR6.8 billion supported by EBITDA expansion. Solid performances in Iraq, Kuwait, Algeria, and Maldives contributed positively to additional FCF generation in the year.

Ooredoo Group retained its robust investment grade rating in 2023.Furthermore, the Group’s financial position remains secure from interest rate risks as approximately 96 percent of the debt is structured on a fixed rate basis. Liquidity remains strong, with QR10.5 billion in cash reserves and QR5 billion available in undrawn facilities.

Across the Group, most of the operations added customers to the network closing the year with a total customer base of 57.6 million, up by 3 percent YoY.

Including IOH, the customer base reached a total of 156.4 million.

The board will recommend distributing a cash dividend of QR0.55 per share at the Annual General Meeting, to be held in March 2024. This represents an increase of 28 percent YoY and a payout of 59 percent of normalised earnings and is in line with the dividend policy.

Ooredoo Group has a sustainable and progressive dividend policy that aims for a payout in the range of 40 percent to 60 percent of normalised earnings.

Ooredoo Qatar increased its customer base by 2 percent YoY (excluding the FIFA 2022 connections) to 3 million despite a challenging operating environment (softer economic activity and increased competition in the mobile segment).

Qatar delivered revenue of QR7,286 million in 2023 against QR 7,960 million in 2022. On a reported basis, this reflects an 8 percent decrease YoY as the FY 2022 base was bolstered by the World Cup. During the year, the operation decided to scale down the low-margin wholesale business and carved out Ooredoo Financial Services.

On a like-for-like basis excluding the FIFA impact, revenue remained flat.

EBITDA decreased by 6 percent YoY to QR3,603 million due to a higher comparison base and one-off impacts. Normalising for the aforementioned items and as well as one-off provisions, EBITDA declined by 1 percent YoY. The operation sustained a solid EBITDA margin of 49 percent, up by 1pp YoY.

Ooredoo Kuwait delivered a strong result for the year, supported by the drive for operational efficiencies. The focus on profitability boosted Ooredoo Kuwait to second position in terms of EBITDA market share, marking a significant achievement.

Revenue grew by 4 percent YoY to QR2,914 million, supported by higher service revenue (in voice and data).

Revenue growth and cost efficiencies contributed to an EBITDA expansion of 14 percent YoY to QR971million and a 3pp improvement in the EBITDA margin to close at33 percent.