Dear Shareholders,
On behalf of the Board of Directors, I am pleased to share with you Vodafone Qatar’s financial results and business performance for the year ended 31 December 2019.
For the year under review, we delivered solid growth in our financial and operational performance. We sustained profitable growth for the second year in a row, finishing 2019 with eight consecutive quarters of higher year-on-year revenue despite the blockade of the State of Qatar continuing into its second year. This strong growth clearly demonstrates a winning strategy that focuses on strengthening and growing our core business and bringing innovative digital services and solutions to market.
Our significant investments in network and technology infrastructure that includes the Company’s roll out of its live 5G commercial network which is close to completion in Doha, yielded stellar results, and most importantly, is supporting the realisation of a digital society under the Qatar National Vision 2030.
Vodafone Qatar reported Net Profit of QR 144 million, a 22% increase compared to the previous year.
Total revenue increased by 1% year-on-year to reach QR 2,125 million driven by higher demand for the Company’s Postpaid and broadband services. Service Revenue grew by 2.4% to reach QR 1,949 million. Vodafone Qatar is now serving 1.74 million mobile customers with solid growth coming from the Postpaid and Fixed product plans.
EBITDA for the reported period stood at QR 709 million representing an increase of 21% compared to last year, positively impacted by higher service revenue, lower costs and the adoption of International Financial Reporting Standard (IFRS) 16. Consequently, EBITDA Margin improved by 5.6 percentage points to reach 33.4%.
Based on the strong financial performance of the Company during the year and its objective to enhance shareholders’ value, the Board of Directors recommended the distribution of a cash dividend of 5% of the nominal share value, i.e. QR 0.05 per share, which will be presented at the Company’s next Annual General Assembly for approval.
On behalf of the Board of Directors, thank you to His Highness Sheikh Tamim bin Hamad Al-Thani, the Amir of the State of Qatar and to His Highness, Sheikh Hamad bin Khalifa Al-Thani, the Father Amir. The Board expresses its gratitude to the regulators for extending their continued support for our vision, in particular the Communications Regulatory Authority, the Ministry of Transport and Communications, the Ministry of Commerce and Industry, the Qatar Financial Markets Authority and the Qatar Stock Exchange.
My sincere appreciation to the executive management team for their leadership and to our dedicated employees for their tireless efforts and commitment, as well as to our customers and valued shareholders who are partners in this year’s successes. I am very confident that we are well positioned to sustain these sound financial results in 2020.
Abdulla bin Nasser Al Misnad
Chairman of the Board of Directors
Dear Shareholders,
Last year, we committed to ensuring we had a strong and steady foundation to accelerate our growth in 2019. We are pleased to share with you that this year marked a strong continuation of our responsible growth. We finished 2019 with eight consecutive quarters of total revenue growth on a year-on-year basis while the national telecoms market declined over the same period. Our mobile customer base reached 1.74 million users and we now have 22.4 percent of the total revenue market share (12 months rolling basis as of Q3-2019) in Qatar. This shows that our strategic focus is yielding strong results despite adverse trends affecting the industry as a whole. We have been able to achieve this performance as a result of a disciplined focus on four key strategy pillars.
We take great pride in our role in leading the digital transformation of Qatar and the region. Over the past 11 years we have invested more than 12 billion Qatari Riyals to create a world-leading telecommunications system. The foundation of this lies in our state of the art infrastructure. We have renewed investment in this infrastructure over the past 24 months – over 1 billion Qatari Riyals has gone towards the expansion of both our mobile and fixed access networks, IPTV, NB-IoT, and 5G. Vodafone Qatar’s 5G network, in just over a year since its launch, now covers key areas across the country including 70% of Doha. Our coverage rates continue to increase in line with our targets.
To emphasize our customer promise of delivering a world class experience, we re-branded our network to GigaNet and subsequently launched successful GigaHome and GigaBusiness broadband services along with GigaTV - our premium entertainment service. These investments in an underlying infrastructure layer and new products and services, have enabled us to diversify our revenue mix to a much healthier level than where we stood a couple of years ago. This more diversified revenue mix has proven an effective counter-balance to customer behaviour changes. It has also helped to minimize impact on overall business performance stemming from aggressive market pricing moves.
The degree of complexity within our industry has never been higher. From business and operating models to pricing, products, convergence of access networks to a plethora of IT systems, platforms, and applications. In many cases this increased complexity has resulted in higher costs, lower operating margins, longer time to market for new products and suboptimal customer experiences for telecom operators globally.
Our view is that in order to continue to outperform, we need to continue to simplify the way we work and the products we build.
We worked to achieve this through three key focus areas:
Leading Innovation
In order to retain our customer relevance and build stronger customer relationships, we are curating new digital experiences in partnership with leading local and international brands and digital-native companies. These partnerships enable us to own unique digital services and solutions to market. This year we partnered with leading brands including Qatar Airways, Talabat, Careem, the ENTERTAINER, WAVO, Eros NOW and DOCOMO Digital to deliver exciting and impactful user experiences to our customers.
Secondly, we have expanded our role in developing smart solutions for Enterprise customers with the launch of our NB-IoT network and enterprise ICT partnerships to support smart city initiatives. At this year’s Qatar IT Exhibition and Conference (QITCOM), an international conference and exhibition on innovative and disruptive technologies, we showcased our best smart Enterprise solutions giving us a leading edge at the exhibition and being awarded The Best Interactive Booth in the entire exhibition.
Generating long-term value in a responsible manner for our shareholders
Overall, our financial performance reflects the aforementioned company achievements. EBITDA margin for the year increased 33.4% vs. 27.8% in 2018 and we delivered a net profit of 144 million Qatari Riyals, which represents a 22% increase year-on-year.
Finally, I want to thank our management team and the energy and engagement of our staff. Our whole team is deeply committed to leading the roll out of new intelligent platforms and connectivity solutions to power the smart cities of the future, building world-class networks, and to developing the next generation ecosystem of digital products and services.
Finally, I want to thank our management team and the energy and engagement of our staff. Our whole team is deeply committed to leading the roll out of new intelligent platforms and connectivity solutions to power the smart cities of the future, building world-class networks, and to developing the next generation ecosystem of digital products and services.
Sincerely,
Hamad Abdulla Al-Thani
Chief Executive Officer
Vodafone Qatar offers a comprehensive range of services that include voice, messaging, data, fixed communications, Internet of Things and ICT managed services, for consumers and businesses alike. The Company began commercial operations in 2009 and has 1.74 million mobile customers as of 31 December 2019.
Vodafone Qatar is a key driver of innovation, leading the way as one of the first operators in the world to go live with commercial 5G services and to offer customers a range of 5G products and services. This is a result of rapid progress in rolling out its 5G network across the country since switching it on in August 2018.
Vodafone Qatar is also accelerating the growth of its fixed network infrastructure and is providing the backbone and communications ecosystem for many of the country's iconic developments.
With a commitment to developing the digital infrastructure that will contribute to Qatar's long-term growth and prosperity while enhancing quality of life, Vodafone Qatar’s relationship with the community it operates in extends well beyond the products and services it offers. The Company believes that the true value of a business lies in how it creates economic, environmental and social value. Guided by this belief, Vodafone Qatar targets social investment in three key areas: digital safety, community giving, and the application of technology to deliver long-term public benefits.
With over 30,000 institutional and retail shareholders, Vodafone Qatar is 92.5% Qatari-owned. This figure includes the 45% of shares owned by Vodafone and the Qatar Foundation LLC. As a member of the Qatar Stock Exchange, Vodafone Qatar has paid-up capital of QAR 4.227 billion.
Vodafone Qatar’s vision for the future is rooted in its mission to connect today’s ideas with the technologies of tomorrow by pioneering digital innovation and becoming people’s first choice for telecoms and digital services. The Vodafone brand says – The Future is Exciting, Ready? – representing an invitation from Vodafone to all its customers and the people of Qatar to embrace and enjoy the digital future together, as partners.