Vodafone Qatar Releases Full Year Financial Results -Revenue exceeds prospectus plan by 26%
15 May 2010: Today Vodafone Qatar Q.S.C. ("Vodafone Qatar" or "The Company") announced its financial results for the year ended 31 March 2010 showing revenue that is 26% ahead of plan.
Vodafone Qatar's key financial achievements are as follows:
- 464,962 Customers at 31 March which is 121% ahead of plan
- 28% Population Share as of 31 March
- 18% Customer Market Share as of 31 March
- Average Revenue Per User (ARPU) is QAR 101 for the three months to 31 March
- Revenue of QAR 361.5 million for the full year to 31 March, which is 26% ahead of plan.
- EBITDA loss of QAR (225.4) million for the full year to 31 March which was expected and is in-line with the original plan outlined in the Initial Public Offering (IPO) prospectus
- Quarterly Adjusted EBITDA continues to improve; Adjusted EBITDA for the March quarter was QAR (28.7) million compared to QAR (38.6) million for the December quarter.
- Net Loss of QAR (673.4) million for the full year to 31 March was expected and is in-line with the original plan outlined in the Initial Public Offering ("IPO") prospectus.
Since Vodafone Qatar's fully-subscribed IPO raising QAR 3,381.6 million in May 2009, the Company progressed rapidly. They opened their first retail store in July 2009 and their mobile network now covers 100% of the country of Qatar.
Following the launch of commercial services in July 2009 Vodafone Qatar's customer base has grown rapidly, with most customers joining since the launch of Red prepay in September 2009. In the last quarter of the financial year, Vodafone Qatar's customer base grew 32% as a result of continued international calling promotions and the 2010 domestic calling campaign whereby all new and existing customers were credited with 2,010 minutes of free Vodafone-to-Vodafone calling to be used throughout the year 2010.
"In any market where there is a monopoly, customers anxiously await the arrival of a competitor to introduce change and lower prices. The strength of the Vodafone brand and the exciting offers and promotions that we have brought to the market have enabled us to exceed people's expectations," said Vodafone Qatar's Chief Executive Officer, Grahame Maher.
The Company's customer base continues to grow; on 9 May Vodafone Qatar announced that they had reached 500,000 customers. This is 7.5% growth in just over five weeks from their financial year end and means that 30% of the population of Qatar now have a Vodafone Qatar SIM.
Whilst Vodafone Qatar's customer numbers are 121% ahead of plan primarily as a result of their exciting offers and promotions, revenue is 26% ahead of plan as ARPU was lower than expected and customers continue to maintain dual SIMs. While customers maintain dual SIMs, revenue is split between Vodafone Qatar and its competitor. A significant proportion of revenue has come from international calling which often attracts higher interconnect rates (the cost of calling networks in other countries) than calling domestically.
Vodafone Qatar's reported net loss of QAR (673.4) million for the year ended 31 March was entirely expected and is in-line with what was outlined in the IPO prospectus. In most companies this would typically be compared to the net loss experienced in the previous financial year, which for Vodafone Qatar was QAR (132.9) million. However, Vodafone Qatar's start-up situation makes this comparison inappropriate. Firstly the Company had no customers last financial year and was therefore incurring only costs related to the establishment of the company without the benefit of generating revenue. Secondly, the amortisation of the license fee began on the date the network was ready for service in May 2009, and was therefore not present in last year's financial statements. The amortisation of the QAR 7.7 Billion license fee is a significant amount and represents a considerable portion of the Company's net loss to date. The QAR 7.7 Billion license fee is amortised equally over the life of the license from May 2009 to the end of the license period which is June 2028.
On the announcement of Vodafone Qatar's full year results, Chief Financial Officer John Tombleson commented, "We now have a substantial customer base that will help drive future performance and forms a solid basis for generating future revenue growth. We expect to build upon our achievements in the next financial year.