Abdulla Bin Nasser Al Misnad
On behalf of the Board of Directors, I am pleased to present Vodafone Qatar’s financial results and business performance for the year ended 31 December 2018.
Despite the continuing blockade of the State of Qatar, we have delivered significant improvements and solid growth in our financial and operational performance in 2018.
Vodafone Qatar’s strong financial results for the financial year 2018 are primarily due to its success in growing its Postpaid subscribers and fixed services, as well as its effective cost optimisation programme.
Total Revenue returned to year-on-year growth for the first time in 4 years, increasing 5.1% year-on-year to reach QR 2,101 million for the year ended 31 December 2018 driven by growth in Postpaid, fixed and handset revenue.
EBITDA before industry fee for the reported period stood at QR 584 million representing an increase of 8.5% compared to last year, positively impacted by higher revenue and lower costs. Consequently, the EBITDA Margin before industry fee improved by 0.9 percentage points to reach QR 27.8%.
The Company reported Net Profit of QR 118 million for the year ended 31 December 2018, the first ever-profitable year, resulting in a significant increase of QR 374 million compared to last year. Free Cash Flow for the year was QR 201 million, a 33% increase year-on-year, consequently reducing net debt to QR 419 million.
Based on the 2018 solid financial results, the Board of Directors has recommended the distribution of a cash dividend of 5% of the nominal share value, i.e. QR 0.25 per share, totalling QR 211.4 million, for approval at the Company’s Annual General Assembly.
Vodafone Qatar is now serving 1,417,000 customers. Postpaid customers grew outstandingly this year by 24.1% due to the innovative products and the popularity of Vodafone’s FLEX, Red and Enterprise plans that suit all customer needs. Reflecting the Company’s growth in Postpaid, the total Average Revenue Per User (ARPU) for the year stood at QR 105, a 5.6% growth year-on-year.
On behalf of the Board of Directors, thank you to His Highness Sheikh Tamim Bin Hamad Al Thani, the Emir of the State of Qatar and to His Highness, Sheikh Hamad Bin Khalifa Al Thani, the Father Emir. The Board expresses its gratitude to all regulators for their continued support, 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 thanks to the executive management team and our incredible employees for their efforts and dedication, as well as to our customers and valued shareholders who are the foundation for our success. I am confident that we are positioned for continued prosperity in 2019.
Hamad Bin Abdulla Al-Thani
Chief Executive Officer
I believe we will look back in years to come and consider 2018 as a truly significant turning point in the life of our company. The monumental decisions made and milestones achieved in our strategy have put us on a clear path to growth. This annual review is a celebration of our many accomplishments.
Securing our long-term success
In February, we announced three significant measures that will sustain our financial growth and profitability over the long term.
- The Qatar Foundation for Education, Science and Community Development entered into a conditional Share Purchase Agreement with Vodafone Europe to purchase shares representing 51 per cent of the share capital of Vodafone and the Qatar Foundation LLC.
- We secured the necessary regulatory approvals to reduce our share capital from QAR 8.454 billion to QAR 4.227 billion and extinguish our historical accumulated losses.
- We secured an extension of our licence for an additional 40 years to 2068, reducing our annual license amortisation cost from QAR 403 million to QAR 84 million.
The effects of these measures have been swift and marked, enabling us to deliver significant progress across our strategic pillars. They reflect our core strength as a globally recognised brand with a deep understanding of the local market.
By becoming a majority Qatari-owned company, we have gained strategic partnerships with numerous important government and local organisations. This move has accelerated our vision to turn Qatar into one of the most connected and technologically-advanced nations in the world – benefiting the entire population.
Delivering seamless experiences for customers
I am incredibly proud of our employees for their relentless focus on putting our customers first and at the forefront of everything we do while continuously improving the products, services, and experiences our customers enjoy. Whether in-store, online or via our digital channels that are used today by more than 500 thousand people each week. Together, we have been rightly focused on ensuring that every customer touch-point and every product delivers a seamless, efficient and smooth experience.
To this end, we have implemented customer-centric training and development programmes, invested in advanced analytics, and focused a pipeline of innovative products and services to further improve the customer experience. All of this would not be possible without the continued delivery of world-class performance. Over the past three years alone, we have spent more than QAR 1 billion on building world-class infrastructure to deliver the best possible experience to our customers. Our success is reflected in the independent results of an industry audit conducted by the Communications Regulatory Authority (CRA).
Vodafone Qatar achieved the best speeds for average downloads and uploads for local data. On voice, Vodafone Qatar had the fastest call set-up time and best voice quality, as well as 100 per cent on call completion. Our customers are now experiencing crystal clear voice quality and enhanced data speeds, allowing for seamless content streaming and superfast downloads.
Becoming a fully converged telecommunications business
We made major strides in 2018 to become a fully converged telecommunications company, building a comprehensive range of products and services for both consumers and businesses alike. I am proud to say that we are now much more than a mobile-focused business. We are becoming a digital-first operation that can deliver the right range of propositions for the evolving demands of our customers.
We can all be proud of Vodafone’s role in accelerating Qatar’s progress in the global race to develop 5G. Since switching on of our first, live 5G network in August, we have shown the amazing potential of 5G to transform how we all live and work.
With 5G deployments well underway now across key locations, we are realising our commitment to invest in Qatar’s information, communication, and technology sector and bring world-class infrastructure to the country. Our 5G progress is moving us closer to becoming “Gigabit Qatar”, a nation where people enjoy ultra-fast connection speeds beyond one gigabit per second on the move and everywhere in-between.
Beyond our investments in 5G technology, we are also investing heavily in our fixed-network infrastructure to accelerate Qatar’s journey to become one of the most connected countries in the world. From Lusail City to the Pearl and many more, we consider ourselves important partners in the country’s plan to develop thriving, futuristic cities with exceptionally high quality of life.
Ready for a brighter tomorrow
This report shows that we have taken the right steps to lay a strong and steady foundation for our company in 2018 that can accelerate growth in 2019 and beyond. We will continue to leverage the power of innovation and technology to make a significant and meaningful contribution to Qatar’s National Vision 2030. Our teams are committed and focused with the right strategy to succeed.
The future is exciting. And we are ready. Ready to lead Qatar towards a brighter tomorrow.
Who We Are
Vodafone Qatar provides a range of services including voice, messaging, data, fixed communications and ICT managed services.
Vodafone Qatar switched on its mobile network in March 2009 and has been delivering great value to customers since with a range of innovative products and services. Since our nine years of commercial operation in Qatar, more than 1.4 million customers are actively using Vodafone’s services supported by our state-of-the-art network.
Our purpose is to inspire everyone to live a better today and build a better tomorrow. We are the most innovative digital company in Qatar, blending the best of technology and human interaction in a personal, instant and simple way. We are committed to providing world-class telecommunications infrastructure and services to achieve Qatar’s National Vision 2030.
With over 31,000 institutional and retail shareholders, Vodafone Qatar is 94 per cent Qatari-owned. This includes the 45 per cent 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.