Customer base increased by 6% to exceed 27 million

KUWAIT: National Mobile Telecommunications Company K.S.C.P "Ooredoo Kuwait" announced yesterday its financial results for the quarter ended 31 March 2019:

Financial highlights

• Consolidated customer base increased by 6 percent to 27.4 million in Q1 2019, compared to 25.8 million in Q1 2018.
• Maldives recorded good growth in revenue and Tunisia increased revenue in local currency terms. However, revenues in KD were impacted by a 24.1 percent depreciation of the Tunisian Dinar. Consequently, consolidated revenue decreased by 12 percent to KD 154.2 million for Q1 2019, compared to KD 174.6 million for the same period in 2018.
• EBITDA increased by 6 percent for Q1 2019 to KD 58.6 million, compared to KD 55.3 million for the same period in 2018, supported by the implementation of IFRS 16, a new accounting standard and operational efficiencies.
• Net profit attributable to NMTC was KD 8.8 million for Q1 2019, compared to KD 9.2 million for the same period in 2018. The decrease was mainly caused by a lower Algerian contribution due to a weak economic environment, currency devaluation and price competition.
• The consolidated earnings per share was 17.6 fils for Q1 2019, compared to 18.3 fils per share earned for the same period last year.

Sheikh Saud Bin Nasser Al-Thani, Chairman of the Board of Directors commented: "Ooredoo Kuwait (NMTC) had a reasonable start to the year posting a 6 percent increase in EBITDA to KD 58.6 million and a net profit of KD 8.8 million during the first quarter of 2019. This is a result of our renewed focus on cost optimization as part of our broader digital transformation strategy. The EBITDA increase was also supported by the implementation of IFRS 16, a new accounting standard.

Our top line results remain under pressure as we navigate the unique challenge in each of our territories against a backdrop of a globally evolving telecommunications industry and unfavourable Foreign Exchange rates. We reported revenues of KD 154.2 million for the Q1 2019 compared with KD 174.6 million for the same quarter last year.

At the center of everything we do is our vision to enrich the digital lives of our customers, which means staying abreast of the latest trends in the telecom sector and adapting our offering to meet the evolving needs of our customers. Our success in this regard is reflected by the 6 percent increase in our group customer base, compared to the same quarter last year, to 27.4 million at the end of Q1 2019.

Financially, we reported a good set of results with most of our operations reporting an increase in EBITDA. However, a weak economic environment and price competition in Algeria contributed to the decrease in group net profit during the period.

In Kuwait, we made significant strides towards improving our margin, resulting in a 48 percent increase in EBITDA during the quarter as compared to the same period last year. This was largely driven by a reduction in handset sale as well as improved efficiencies and cost optimizations.

In Tunisia, we increased our customer base by 7 percent confirming our position as the Number 1 mobile telecom player. In Algeria we made good progress in preparing for a data centric future, by increasing the coverage of our 4G network, and increasing our subscriber base by 4 percent.

In Palestine we performed exceptionally well, with EBITDA increasing 71 percent as compared to the same period last year. Growth in Palestine was supported by a 7 percent increase in our customer base and various cost optimization initiatives. Maldives performed well, with a 9 percent increase in EBITDA and a healthy customer base of 462,000 customers, up by 5 percent compared to last year."

Review of operations

The Group's operational performance can be summarized as follows:

Ooredoo - Kuwait

Ooredoo's customer base in Kuwait increased to 2.5 million in Q1 2019, up by 13 percent compared to Q1 2018. Revenues for Q1 2019 were KD 56.1 million, compared to KD 65.5 million in Q1 2018. EBITDA was strong, increasing to KD 17.5 million for Q1 2019, compared to KD 11.8 million for Q1 2018. The increase of 48 percent reflected good operational efficiencies across the business as well as a positive impact of the new IFRS 16 accounting standard.

Ooredoo - Tunisia

Ooredoo's customer base in Tunisia increased 7 percent to reach 9.1 million customers in Q1 2019, compared to the same period in 2018. The Tunisian Dinar depreciated by 24.1 percent year on year, leading to a decrease in revenues from KD 31.9 million in Q1 2018 to KD 27.4 million in Q1 2019. In local currency terms, revenues were up by 6.7 percent. EBITDA was KD 11.8 million in Q1 2019 compared to KD 11.9 million in Q1 2018.

Ooredoo - Algeria

Customer base in Algeria increased by 4 percent to 14.0 million in Q1 2019, compared to Q1 2018. Business in Algeria was negatively impacted by the devaluation of the Algerian Dinar, weak economic environment and price competition. Revenues also decreased to KD 53.7 million in Q1 2019, compared to KD 60.4 million in Q1 2018. EBITDA was KD 21.7 million in Q1 2019, down from KD 25.2 million in Q1 2018. Algerian Dinar depreciated by 2.9 percent year on year.

Ooredoo - Palestine

Customer base in Palestine increased by 7 percent to reach 1.3 million customers in Q1 2019. Revenue slightly decreased to KD 7.0 million in Q1 2019, compared to KD 7.1 million in Q1 2018. EBITDA was strong, increasing to KD 1.9 million in Q1 2019 compared to KD 1.1 million in Q1 2018, up 71 percent compared to the previous year.

Ooredoo - Maldives

Ooredoo Maldives reported a 3 percent increase in revenues to KD 10.0 million in Q1 2019, compared to KD 9.6 million in Q1 2018. EBITDA for Q1 2019 was KD 5.7 million, an increase of 9 percent compared to KD 5.2 million for the same period in 2018. Ooredoo Maldives now serves a total of 462k customers.