Ooredoo Qsc reports 21.3% CAPEX growth in 2019 and almost no change in Revenue of 29,916
13 Feb 2020 • About Ooredoo Qsc (
$ORDS) • By InTwits
Ooredoo Qsc reported 2019 financial results today. Here are the key drivers of the company's long term financial model:
- Ooredoo Qsc has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.0%. At the same time it's a lot of higher than industry average of 9.1%.
- CAPEX is quite volatile: 1,303 EGPm in 2019, 875 EGPm in 2018, 745 EGPm in 2017, 561 EGPm in 2016, 304 EGPm in 2015
- The company has potentially unprofitable business model: ROIC is 4.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.9x while industry average is 1.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue showed almost no change in 2019. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.0 pp from 36.9% to 40.0% in 2019.
SG&A as a % of Revenue decreased slightly on 1.0 pp from 21.4% to 20.4% in 2019. SG&A as a % of Revenue stuck to a declining trend at -0.85 pp per annum in the last 5 years.
Net Income margin increased slightly on 0.54 pp from 5.2% to 5.8% in 2019.
Investments (CAPEX, working capital and M&A)
In 2019 Ooredoo Qsc had CAPEX/Revenue of 18.9%. Ooredoo Qsc showed small growth in CAPEX/Revenue of 1.4 pp from 17.6% in 2016 to 18.9% in 2019. For the last three years the average CAPEX/Revenue was 15.4%. During 2015-2019 CAPEX as a % of Revenue bottomed in 2017 at 11.6% and was growing since that time.
Return on investment
The company operates at low ROIC (4.9%) and ROE (7.6%). ROIC showed almost no change in 2019. ROE increased slightly on 0.69 pp from 6.9% to 7.6% in 2019.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.9x and Debt / EBITDA is 3.1x. Net Debt / EBITDA jumped on 0.1x from 1.8x to 1.9x in 2019. Debt increased slightly on 1.2% while cash dropped on 15.9%.
Ooredoo Qsc has no short term refinancing risk: cash is higher than short term debt (231.1%).
Management team
Ooredoo Qsc's CEO Saud Bin Nasser Faleh Al Thani is a founder and has spent 4 years with the company. Ooredoo Qsc's CFO is Abdullah Ahmed Al Zaman. Abdullah Ahmed Al Zaman has 1 year tenure at the company.
Financial and operational results
FY ended 31 Dec 2019
Ooredoo Qsc ($ORDS) key annual financial indicators| mln. QAR | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 32,161 | 32,503 | 32,735 | 29,927 | 29,916 | -0.0% |
| SG&A | 7,757 | 7,291 | 6,889 | 6,410 | 6,094 | -4.9% |
| EBITDA | 12,595 | 12,729 | 13,263 | 11,053 | 11,953 | 8.1% |
| EBIT | | | | 3,052 | | |
| Interest expence | | | | 1,858 | | |
| Tax | | | | 485 | | |
| Net Income | 2,118 | 2,193 | 1,967 | 1,565 | 1,725 | 10.2% |
Balance Sheet
|
|---|
| Cash | 18,158 | 16,502 | 18,459 | 17,493 | 14,716 | -15.9% |
| Inventory | | | | 643 | | |
| Short Term Debt | 6,664 | 3,463 | 7,398 | 9,458 | 6,367 | -32.7% |
| Long Term Debt | 36,108 | 38,231 | 32,612 | 27,479 | 31,030 | 12.9% |
Cash flow
|
|---|
| Capex | 8,537 | 5,706 | 3,801 | 4,665 | 5,657 | 21.3% |
| Dividends | | | | 1,121 | | |
Ratios
|
|---|
| Revenue growth | -3.2% | 1.1% | 0.7% | -8.6% | -0.0% | |
| EBITDA growth | 0.8% | 1.1% | 4.2% | -16.7% | 8.1% | |
|
|---|
| EBITDA Margin | 39.2% | 39.2% | 40.5% | 36.9% | 40.0% | 3.0% |
| EBIT Margin | | | | 10.2% | |
| SG&A, % of revenue | 24.1% | 22.4% | 21.0% | 21.4% | 20.4% | -1.0% |
| Net Income Margin | 6.6% | 6.7% | 6.0% | 5.2% | 5.8% | 0.5% |
| CAPEX, % of revenue | 26.5% | 17.6% | 11.6% | 15.6% | 18.9% | 3.3% |
|
|---|
| ROIC | 6.4% | 6.1% | 6.9% | 4.4% | 4.9% | 0.5% |
| ROE | 9.4% | 10.0% | 8.7% | 6.9% | 7.6% | 0.7% |
| Net Debt/EBITDA | 2.0x | 2.0x | 1.6x | 1.8x | 1.9x | 0.1x |
| Interest coverage ratio (ICR) | | | | 1.6x | |
| Interest expence / Average debt | | | | 4.8% | | |
Peers in Fixed Line Telecommunications
Below you can find Ooredoo Qsc benchmarking vs. other companies in Fixed Line Telecommunications industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Adept Telecom ($ADT) | 5.8% | 30.9% | 19.2% | 34.8% | |
| Verizon Communications Inc ($VZC) | | -4.3% | 0.0% | 3.8% | 0.8% |
| O2 Czech Republic As ($O2CZ) | | 0.9% | 0.3% | 0.9% | 1.7% |
| Kt Corp ($KTCD) | | 2.1% | 2.8% | 0.3% | 3.8% |
| BT Group ($BT.A) | -1.7% | 5.7% | 26.6% | -1.4% | |
| |
|---|
| Median (6 companies) | 0.2% | 0.1% | 0.3% | 0.6% | 2.2% |
|---|
| Ooredoo Qsc ($ORDS) | | 1.1% | 0.7% | -8.6% | -0.0% |
Top companies by Gross margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Kt Corp ($KTCD) | 77.9% | 78.5% | 83.5% | 83.0% | |
| Verizon Communications Inc ($VZC) | 60.1% | 59.2% | 59.1% | 57.6% | 58.5% |
| O2 Czech Republic As ($O2CZ) | | 48.5% | 48.7% | 49.9% | 51.3% |
| Adept Telecom ($ADT) | 37.6% | 40.3% | 42.3% | 49.4% | |
| |
|---|
| Median (4 companies) | 41.5% | 48.5% | 53.9% | 53.8% | 54.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Verizon Communications Inc ($VZC) | 37.3% | 34.1% | 35.2% | 30.3% | 35.7% |
| BT Group ($BT.A) | 33.5% | 32.8% | 28.0% | 29.1% | |
| O2 Czech Republic As ($O2CZ) | 29.9% | 27.3% | 27.8% | 28.0% | 29.1% |
| Orange Polska Sa ($OPLD) | 29.1% | 11.9% | 24.6% | 26.0% | 27.7% |
| Adept Telecom ($ADT) | 20.8% | 20.0% | 20.6% | 22.0% | |
| |
|---|
| Median (6 companies) | 29.1% | 28.2% | 28.0% | 27.0% | 29.1% |
|---|
| Ooredoo Qsc ($ORDS) | 39.2% | 39.2% | 40.5% | 36.9% | 40.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Orange Polska Sa ($OPLD) | 16.9% | 44.8% | 17.0% | 20.6% | 19.9% |
| BT Group ($BT.A) | 13.4% | 12.8% | 13.1% | 14.2% | |
| Verizon Communications Inc ($VZC) | 13.5% | 13.5% | 13.7% | 12.7% | 13.6% |
| Kt Corp ($KTCD) | 14.0% | 12.2% | 10.4% | 9.6% | |
| O2 Czech Republic As ($O2CZ) | 4.5% | 4.0% | 5.1% | 3.9% | 4.1% |
| |
|---|
| Median (6 companies) | 14.0% | 13.5% | 13.7% | 11.2% | 13.6% |
|---|
| Ooredoo Qsc ($ORDS) | 26.5% | 17.6% | 11.6% | 15.6% | 18.9% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| O2 Czech Republic As ($O2CZ) | 14.5% | 26.8% | 25.8% | 24.3% | 23.2% |
| BT Group ($BT.A) | 37.5% | 20.7% | 13.9% | 15.4% | |
| Adept Telecom ($ADT) | 14.3% | 16.5% | 14.2% | 14.1% | |
| Verizon Communications Inc ($VZC) | 19.3% | 15.4% | 14.8% | 11.3% | 15.3% |
| Kt Corp ($KTCD) | 5.7% | 6.9% | 6.7% | 6.0% | |
| |
|---|
| Median (11 companies) | 8.2% | 7.8% | 8.3% | 12.7% | 15.3% |
|---|
| Ooredoo Qsc ($ORDS) | 6.4% | 6.1% | 6.9% | 4.4% | 4.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Verizon Communications Inc ($VZC) | 2.1x | 2.4x | 2.6x | 2.8x | 2.8x |
| Orange Polska Sa ($OPLD) | 1.2x | 5.1x | 2.3x | 2.4x | 2.6x |
| Adept Telecom ($ADT) | 0.3x | 1.0x | 2.2x | 2.3x | |
| BT Group ($BT.A) | 1.6x | 2.2x | 1.8x | 2.0x | |
| Kt Corp ($KTCD) | 1.3x | 1.1x | 1.0x | 0.9x | |
| |
|---|
| Median (6 companies) | 1.2x | 1.5x | 2.0x | 2.2x | 2.6x |
|---|
| Ooredoo Qsc ($ORDS) | 2.0x | 2.0x | 1.6x | 1.8x | 1.9x |
