From left: Vodafone Qatar head of investor and shareholder relations Khalid Barzak, Whitehill and Walters address the media to explain its annual performance.

By Santhosh V Perumal/Business Reporter

 

Robust average revenue growth in postpaid and data segments as well as higher market share in mobile and increased customer base helped Vodafone Qatar report a more than 78-fold jump in distributable profit to QR157mn for the year ended 2014.

In view of the stupendous growth in distributable profit, Vodafone Qatar also declared its maiden dividend of QR0.17 per share, entailing a total outgo of QR144mn, to be approved by shareholders at an annual general assembly meeting scheduled on June 18.

A 75% expansion in earnings before interest taxes depreciation and amortisation (EBITDA) to QR496mn, owing to revenue increase and tight cost management, led to strong growth in distributable profit, a yardstick for offering dividend, and 39% year-on-year reduction in net loss.

Vodafone Qatar’s distributable profit for the year ended March 31, 2013 was mere QR2mn. The distributable profit represents the net loss plus amortisation of the licence for the financial year.

The telephone company, which sticks to the April-March format unlike other listed companies that follow the January-December year, also reported a 6% improvement in EBITDA margin to 25%, reflecting better sales mix, scale benefits and cost control, according to its chief financial officer Steve Walters.

“We continue to deliver solid growth in our fifth full year of operations with strong revenue growth…This growth enabled the company to further increase the profitability with EBITDA margin improving,” Vodafone Qatar chairman Sheikh Dr Khalid bin Thani al-Thani said.

Total revenue growth expanded 30% year-on-year to QR1.98bn due to continued customer base growth and higher average revenue per user (ARPU), which improved by 4%, especially from its postpaid connections.

Vodafone Qatar witnessed strong market share improvement, benefiting from the postpaid segment, whose revenue contributes 17% of the total revenue, Walters said, adding mobile revenue market share rose 3.2% to 33.6%.

Vodafone Qatar CEO Kyle Whitehill highlighted the shift in preferences of customers to postpaid, which resulted in higher ARPU.

Mobile customer base grew 22% to 1.33mn with 243,000 new customers being added in 2014 alone. Postpaid customer base surged 55% year-on-year to 128,000, which now represents about 19% of the total customer base.

The robust financial performance also resulted in a first year positive free cash flow of QR144mn due to higher EBITDA and it helped in bringing down the overall net debt, which now stands at QR854mn.

 

QR172mn capex plan; 4G rollout soon

Vodafone Qatar is planning to spend another QR172mn in this year as it has identified big growth opportunities, especially in the enterprise segment and the 4G, which is to be rolled out soon.

“As we plan to launch 4G, our capital expenditure is expected to be higher in financial year (FY) 2015,” Vodafone Qatar chief financial officer Steve Walters said.

He said the capital expenditure, which stood at QR344mn for the year ended 2014, will be higher by 50% in the current year.

To a query when 4G will be launched, Vodafone Qatar CEO Kyle Whitehill said it will be disclosed on June 2.

Asked how the company will fund the capital expenditure, he said Vodafone Qatar has an overall borrowing capacity to the tune of $330mn (QR1.2bn), which is more than sufficient to meet the capital needs.

Of the QR344mn capital fixed asset addition, as much QR320mn, or 93%, went towards strengthening its mobile network and the remaining QR24mn, or 7%, towards fixed line. The company had installed additional 54 sites on air in 2014 for improved transmission capacity in the 2G and 3G segments.

“We have identified big growth opportunities in the enterprise segment and are rapidly growing in this market,” Whitehill said, adding this year it launched a comprehensive range of enterprise grade fixed products including corporate voice, Internet and data network solutions.

It brought the corporate voice and Internet to the business market in Qatar with a locally supported secure device management solution and audio conferencing solution with a free local dial-in number, which can significantly reduce the telecom costs for local businesses.