Ooredoo’s CEO on Q1 Revenue Meeting Estimates
Ooredoo Group announced a decline in profit for the first half of the year despite year-over-year revenue growth. Aziz Aluthman Fakhroo expressed satisfaction with the 4% increase in revenue and beating profit estimates from the Bloomberg survey. However, there was a lower profit compared to the previous year. Fakhroo highlighted the continuous improvement in various metrics over the past two years, setting historical records for the group’s performance.
Improving Performance Metrics
Here are some key points from the discussion about Ooredoo’s performance:
- Top line increased by 4%
- EBITA rose by 6%
- Profitability reached 43%
- Net profit saw a 26% increase
- Most profitable operator in the region with a 43% bit margin
Strong Operational Performance
Fakhroo emphasized that all markets were performing well without any pressures. The customer base was growing, and the company was exceeding its guidance. The goal was to achieve a margin of 43-44% for the year, and in Q1, they were already at 43%, a 1% improvement from the previous year. Despite some provisions, operational performance was ahead of plan.
Tower Unit Spin-Off Plans
The company announced the establishment of the largest tower co in the region with Zain, merging assets from various markets. The goal was to close transactions in multiple markets to release cash. The tower business was expected to create an enterprise value of $2.2 billion without debt. Financial impacts were expected in subsequent closures over 18 months.
Utilizing Cash from Tower Sales
Ooredoo planned to receive proceeds of approximately $700 million from the tower unit transactions. The company aimed to utilize the cash strategically, maintaining discipline and opportunism. With a robust balance sheet and strong free cash flow growth, the focus was on prudent investment and operational efficiency.
Infrastructure Investments
The company was focusing on infrastructure plays, including tower and data center businesses. Investments of up to $1 billion were planned for data center growth to capitalize on cloud services and AI opportunities. The carve-out process in various markets was expected to enhance the company’s capabilities and competitiveness.
Operational Challenges in Palestine
Despite difficulties in operating in Palestine, Ooredoo’s staff in the region remained resilient and dedicated to keeping networks operational. The company continued to provide essential communication services in Gaza and the West Bank, highlighting the importance of connectivity in challenging environments.
Progress in Myanmar Market
The company’s exit from the Myanmar market was progressing, with expectations of a close in the coming months. Despite regulatory challenges and political instability, Ooredoo remained confident in the process. The business performance in Myanmar remained strong, reflecting the company’s strategic decision-making.
Outlook for the Rest of the Year
With a diverse market portfolio and a strong value proposition, Ooredoo aimed to maintain its competitive edge against rivals like Etisalat. Markets like Algeria, Iraq, and Tunisia were identified as significant growth engines, contributing to the company’s balanced performance. The focus was on leveraging different market dynamics to drive sustainable growth.
Hot Take: Ooredoo’s Strategic Growth and Operational Excellence
Ooredoo’s CEO detailed the company’s successful Q1 performance, highlighting revenue growth and surpassing profit estimates. The strategic initiatives, including tower unit spin-offs and infrastructure investments, demonstrate a commitment to sustainable growth and operational efficiency. Despite challenges in certain markets, Ooredoo remains focused on delivering value to customers and shareholders through disciplined decision-making and strategic investments.
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