Qtel 2009 net profit reaches record $769m 

(MENAFN Press) Qtel Board Recommends a Cash Dividend of 70% of Share Face Value

Qatar Telecom Q.S.C. (Qtel or The Qtel Group or The Group) (Ticker: QTEL.QA) announced strong financial results for the twelve months ended 31 December 2009, as the Group continued to drive growth across its 17 country footprint and generate significant returns for shareholders.

Financial Highlights:

Quarterly Analysis
Yearly Analysis

Q4 2009
Q4 2008
% change
FY 2009
FY 2008
% change

Consolidated revenue (QAR m)
6,541
6,000
9.0%
24,025
20,319
18.2%

EBITDA (QAR m)
2,965
2,835
4.6%
11,309
9,825
15.1%

EBITDA margin (%)
45%
47%
(4.2%)
47%
48%
(2.1%)

Net profit attributable to shareholders (QAR m)
431
468
(7.9%)
2,780
2,306
20.5%

Consolidated Customers (m)
60.53
57.52
5.2%
60.53
57.52
5.2%


Earnings per share for the twelve months ended 31 December 2009 grew 7.2 percent to QAR 18.95 (FY 2008: QAR 17.68)

Operational Highlights:

Positive annual revenue, EBITDA and net profit momentum continues; 2009 net profit guidance exceeded

Strong customer growth in Iraq, Algeria and Indonesia leading to more than 76% of Group revenues being generated outside Qatar

Successful launch of Wataniya Palestine and wi-tribe Pakistan

Solid response to competitive challenges in Qatar and Kuwait

EBITDA impacted due to initial competitive entrance dynamics

Non-operational provisions in Q4 2009 impacting profitability

In the twelve months ended 31 December 2009 the Group continued to make significant operational and financial progress, remaining true to its in-market growth strategies and proving its ability to defend and grow market share even in the face of challenging competition and global financial turbulence. This successful execution resulted in a robust full year Group revenue performance, with revenue increasing by 18.2 percent to end 2009 at QAR 24.0 billion (FY 2008: QAR 20.3 billion).

In the same period net profit attributable to shareholders also grew, increasing 20.5 percent to QAR 2.8 billion (FY 2008: QAR 2.3 billion) and at 31 December 2009 the Groups consolidated customer base stood at 60.5 million. EBITDA performance in 2009 was also strong, increasing 15.1 percent over the year to QAR 11.3 billion (FY 2008: QAR 9.8 billion). EBITDA margin remained resilient during the period, standing at 47 percent (FY 2008: 48 percent).

Commenting on the results His Excellency Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani, Chairman of the Qtel Group said:

This has been a year of real achievement for the Qtel Group as I am proud to announce that we are now the largest telecommunications provider in the Middle East - North Africa region by number of operations. Our diversified operations have delivered strong returns and enabled us to thrive in a highly competitive and challenging environment. The Qtel Group successfully delivered 18.2 percent revenue growth and 20.5 percent net profit growth over the 12 months by preserving value in core markets, and through ongoing expansion of operations across regional markets. Most importantly, we have demonstrated the Groups capacity to realise a strong return from shared innovation and collaboration across our increasingly inter-connected operations.

On behalf of the Board of Directors I am also pleased to recommend to the General Assembly a total annual cash dividend of QAR 7 per share. The cash dividend represents 70 percent of the share face value.

Qtels success in the Qatar market in 2009, where it grew its consolidated customer base to 2.40 million in the face of new competition, reflects the groups robust experience in managing competitive pressure and in extending the range of services provided to customers.

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

In 2009 the Qtel Group continued to invest and build on its base to extend into new operations and offer new services across our regional footprint. We focused on improving the network infrastructure to upgrade capacity and capabilities particularly in relation to data and Broadband services. This will help to capture future growth in our key markets. We have also faced changing competitive dynamics in a number of our key markets and have demonstrated the resilience of our market strategies, particularly in Qatar where our focus on products and services, targeted pricing and customer service have enabled us to successfully adapt to these changes.

Review of Operations

The Groups operational performance can be summarized as follows:

Qtel “ Qatar

In the face of new competition, Qtels strategy focused on; retaining and enhancing the companys deep connection with its customers; moving into or expanding in new high potential segments; and continuing to improve our infrastructure, processes and organization to better serve customers.

To ensure success in these key areas, Qtel launched a number of initiatives in 2009, which had a demonstrable impact on company performance and delivery. To ensure success in these key areas, Qtel launched a number of initiatives in 2009, which had a demonstrable impact on company performance and delivery. Some of the major programmes launched in 2009 to enhance customer retention include Nojoom, a customer loyalty programme, as well as the first dedicated data packs ever made available in Qatar, and a range of BlackBerry and data solutions for business devices.

These activities, including the launch of Nojoom, a pioneering customer reward program, ensured a 23.5 percent increase in customer numbers to 2.40 million (FY 2008: 1.95 million) and a 4.4% percent increase in revenue, which closed the year at QAR 5.7 billion (FY 2008: QAR 5.4 billion). EBITDA was impacted due to initial competitive entrance dynamics and for the same period stood at QAR 3.3 billion (FY 2008: QAR 3.4 billion).

Indosat “ Indonesia

Indonesias fast-paced communications market continued to change shape in 2009 and, as in previous years, Indosat has remained successful in keeping pace with these changes.

In support of this strategy, the Company has continued to pay careful attention to the strength and capacity of its network infrastructure. Over the past twelve months Indosat has reduced the pressure on its existing network by successfully removing a significant proportion of the lower-value, calling card type behaviour subscribers from its base. As a result, Indosats subscriber base at 31 December 2009 stood at 33.7 million (FY 2008: 37.0 million). At the same time, the Company has also continued to invest in expanding its reach to new areas outside of its Java core, with the successful launch of the Palapa-D satellite system and Jakabare submarine cable, as well as enhancing its capacity to support new, value-added services.

Revenue for the twelve months ended 31 December 2009 was QAR 6.6 billion (FY 2008 post-acquisition: QAR 4.2 billion) and EBITDA for the same period was QAR 3.2 billion (FY 2008 post-acquisition: QAR 2.1 billion).

Wataniya Telecom

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

Wataniya has worked hard to deliver another successful year as a Group, even in the face of challenging competition in its home market of Kuwait. Wataniya has dealt decisively and effectively with this competition, introducing a new range of innovative and attractive services to appeal to the changing demands of Kuwaiti consumers. In the same period, Wataniya proudly launched commercial operations in Palestine. These efforts, combined with continued good performance in other operations have delivered a 38.8 percent increase in customer numbers to 15.2 million (FY 2008: 10.9 million) and with revenue closing the year at QAR 6.1 billion (FY 2008: QAR 6.5 billion). EBITDA for the same period stood at QAR 2.4 billion (FY 2008: QAR 2.7 billion). Wataniya Kuwait saw an increase in its customer base in 2009 despite competitive dynamics that impacted top line performance. Q4 also saw the impact of non-operational provisions that impacted Wataniyas profitability.

Nawras “ Oman

Progress at Nawras remained strong in 2009, with the Company achieving growth across all key financial metrics in spite of the introduction of mobile resellers to the market in the second half of the year. Nawras has delivered this growth by continuing to pay careful attention to the reach and quality of its network and through the launch of new, leading-edge services such as mobile TV. Pre-paid broadband growth during the period has been particularly strong, with Nawras recording a ten-fold increase this year in the number of unique broadband users on its network.

These developments have contributed to a 23.2% percent increase in the customer base this year, closing 2009 at 1.86 million. Similarly, revenue increased this year to QAR 1.6 billion (FY 2008: 1.3 QAR billion) with EBITDA performance also improving, up 62.7 percent on 2008 to QAR 827 million (FY 2008: 508 QAR million).

Nawras continues to work towards the commercial implementation of its fixed line mandate, with an international gateway expected to become operational in 2010.

Asiacell - Iraq

Asiacell continued to make significant progress in 2009, forging ahead with its growth plans in this challenging yet rewarding emerging market place. The clearest signs of this progress can be seen in the strong growth achieved this year in the Companys subscriber base, with total active subscribers growing by over 20.4 percent during 2009 to close the year at 7.35 million (FY 2008: 6.11 million). As a result, Asiacell also delivered good revenue growth in 2009, with revenue increasing during the year by 40.4 percent to QAR 4.0 billion (FY 2008: QAR 2.8 billion). EBITDA also increased, growing 43.9 percent year-on-year to end 2009 at QAR 2.2 billion (FY 2008: QAR 1.5 billion).

Qtel will publish its Q4 and FY 2009 financial statement on its website, accessible at: www.qtel.qa