Ooredoo Qsc reports 34.6% CAPEX decline while 1.1% Revenue growth
25 Jan 2017 • About Ooredoo Qsc (
$ORDS) • By InTwits
Ooredoo Qsc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ooredoo Qsc has high CAPEX intensity: 5 year average CAPEX/Revenue was 23.7%. At the same time it's a lot of higher than industry average of 12.5%.
- CAPEX is quite volatile: 1,343 in FY2016, 2,139 in FY2015, 2,555 in FY2014, 3,721 in FY2013, 5,075 in FY2012
- The company has business model with low profitability: ROIC is at 8.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.7x while industry average is 1.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ooredoo Qsc ($ORDS) key annual financial indicators
| mln. QAR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 33,476 | 33,851 | 33,207 | 32,161 | 32,503 | 1.1% |
| SG&A | | 8,225 | 8,305 | 7,757 | 7,291 | -6.0% |
| EBITDA | 15,389 | 14,360 | 12,492 | 12,595 | 14,575 | 15.7% |
| Net Income | 2,947 | 2,579 | 2,134 | 2,118 | 2,193 | 3.5% |
Balance Sheet
|
|---|
| Cash | 15,006 | 20,305 | 17,437 | 18,158 | 16,502 | -9.1% |
| Short Term Debt | 7,308 | 8,058 | 7,156 | 6,664 | 3,313 | -50.3% |
| Long Term Debt | 32,019 | 37,254 | 35,641 | 36,108 | 37,435 | 3.7% |
Cash flow
|
|---|
| Capex | 7,316 | 9,298 | 8,391 | 8,537 | 5,585 | -34.6% |
Ratios
|
|---|
| Revenue growth | 5.5% | 1.1% | -1.9% | -3.2% | 1.1% | |
| EBITDA growth | 5.6% | -6.7% | -13.0% | 0.8% | 15.7% | |
| EBITDA Margin | 46.0% | 42.4% | 37.6% | 39.2% | 44.8% | 5.7% |
| Net Income Margin | 8.8% | 7.6% | 6.4% | 6.6% | 6.7% | 0.2% |
| SG&A, % of revenue | | 24.3% | 25.0% | 24.1% | 22.4% | -1.7% |
| CAPEX, % of revenue | 21.9% | 27.5% | 25.3% | 26.5% | 17.2% | -9.4% |
| ROIC | 9.3% | 8.5% | 6.4% | 6.4% | 8.8% | 2.4% |
| ROE | 12.1% | 9.8% | 8.8% | 9.4% | 10.0% | 0.6% |
| Net Debt/EBITDA | 1.6x | 1.7x | 2.0x | 2.0x | 1.7x | -0.3x |
Revenue and profitability
The company's Revenue increased slightly on 1.1% in 2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.9 pp from 14.7% to 19.6% in FY2016.
SG&A as a % of Revenue decreased slightly on 1.7 pp from 24.1% to 22.4% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 17.2% in 2016. CAPEX/Revenue dropped on 10.3 pp from 27.5% in 2013 to 17.2% in 2016. It's average CAPEX/Revenue for the last three years was 23.0%.
Return on investment
The company operates at low ROIC (8.78%) and ROE (9.97%). ROIC increased on 2.4 pp from 6.4% to 8.8% in 2016. ROE increased slightly on 0.61 pp from 9.4% to 10.0% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.7x and Debt / EBITDA is 2.8x. Net Debt / EBITDA dropped on 0.3x from 2.0x to 1.7x in 2016. Debt decreased on 4.7% in 2016 while cash decreased on 9.1% in 2016.
Appendix 1: Peers in Fixed Line Telecommunications
Below we provide Ooredoo Qsc benchmarking against other companies in Fixed Line Telecommunications industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telefonica Sa ($TDE) | -0.8% | -8.5% | -23.8% | 26.4% | |
| Alternative Networks ($AN.) | | -0.4% | 17.5% | 9.2% | -7.5% |
| Syqic ($SYQ) | 37.6% | 20.5% | 126.5% | 9.2% | |
| Adept Telecom ($ADT) | | -4.1% | -0.8% | 5.8% | 30.9% |
| Verizon Communications Inc ($VZC) | | 4.1% | 5.4% | 3.6% | -4.3% |
| |
|---|
| Median (13 companies) | -0.8% | -4.1% | -0.8% | 0.0% | 0.8% |
|---|
| Ooredoo Qsc ($ORDS) | | 1.1% | -1.9% | -3.2% | 1.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kt Corp ($KTCD) | 75.5% | 76.0% | 77.9% | 77.9% | |
| Verizon Communications Inc ($VZC) | 60.1% | 62.8% | 60.7% | 60.1% | 59.2% |
| Telecom Egypt ($TEEG) | 41.4% | 41.9% | 44.2% | 41.6% | |
| Alternative Networks ($AN.) | 39.0% | 39.2% | 41.2% | 41.3% | 40.9% |
| Syqic ($SYQ) | 57.3% | 59.9% | 43.6% | 41.2% | |
| |
|---|
| Median (6 companies) | 49.4% | 50.9% | 43.9% | 41.5% | 40.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Verizon Communications Inc ($VZC) | 25.6% | 40.3% | 28.4% | 37.3% | 34.1% |
| BT Group ($BT.A) | 31.2% | 32.0% | 31.9% | 33.5% | 33.4% |
| Rostelekom ($RKMD) | 39.7% | 39.0% | 33.0% | 33.4% | |
| Koninklijke Kpn Nv ($0O8F) | 35.9% | 34.1% | 39.1% | 33.2% | |
| Hellenic Telecom.Organization S.A. ($OTES) | 32.0% | 28.8% | 35.4% | 31.3% | |
| |
|---|
| Median (13 companies) | 32.0% | 32.0% | 31.7% | 29.1% | 26.7% |
|---|
| Ooredoo Qsc ($ORDS) | 46.0% | 42.4% | 37.6% | 39.2% | 44.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telecom Egypt ($TEEG) | 5.1% | 6.8% | 13.0% | 21.4% | |
| Rostelekom ($RKMD) | 31.7% | 23.6% | 19.3% | 21.1% | |
| Telefonica Sa ($TDE) | 15.2% | 17.0% | 19.1% | 18.7% | |
| Orange Polska Sa ($OPLD) | 16.6% | 16.9% | 17.6% | 16.9% | |
| Hellenic Telecom.Organization S.A. ($OTES) | 11.7% | 14.8% | 15.4% | 16.9% | |
| |
|---|
| Median (13 companies) | 13.5% | 13.7% | 12.9% | 14.0% | 7.4% |
|---|
| Ooredoo Qsc ($ORDS) | 21.9% | 27.5% | 25.3% | 26.5% | 17.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BT Group ($BT.A) | 23.6% | 27.0% | 34.7% | 37.5% | 21.6% |
| Syqic ($SYQ) | 38.9% | 3.2% | 33.9% | 22.9% | |
| Alternative Networks ($AN.) | 35.2% | 33.7% | 28.5% | 20.2% | 15.2% |
| Verizon Communications Inc ($VZC) | 8.0% | 16.7% | 10.1% | 19.3% | 15.4% |
| O2 Czech Republic As ($O2CZ) | 11.8% | 11.7% | 7.2% | 14.5% | |
| |
|---|
| Median (13 companies) | 11.2% | 9.7% | 8.7% | 8.2% | 15.9% |
|---|
| Ooredoo Qsc ($ORDS) | 9.3% | 8.5% | 6.4% | 6.4% | 8.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telefonica Sa ($TDE) | 2.5x | 2.5x | 3.6x | 4.2x | |
| Koninklijke Kpn Nv ($0O8F) | 3.8x | 3.4x | 3.0x | 3.6x | |
| Verizon Communications Inc ($VZC) | 1.7x | 0.8x | 2.8x | 2.1x | 2.4x |
| Rostelekom ($RKMD) | 1.7x | 1.8x | 1.8x | 1.8x | |
| BT Group ($BT.A) | 1.7x | 1.6x | 1.6x | 1.6x | 2.2x |
| |
|---|
| Median (13 companies) | 1.7x | 1.1x | 1.4x | 1.2x | 1.6x |
|---|
| Ooredoo Qsc ($ORDS) | 1.6x | 1.7x | 2.0x | 2.0x | 1.7x |
