Omantel Performance 2011-Q4 Final

Omantel Group Performance 2011

January December 2011 Presentation to Investor Community

Conference Call

15th February 2012 at 2 PM (Oman Time)

This presentation is prepared solely for the purpose of Conference call with Investor community. This

presentation or its contents should not be distributed without the permission of Omantels concerned authorities

About us

Slide 3

History: from incumbent to integrated service provider

2011

Legal merger of Omantel and Oman

Mobile

LTE Trial

2009

3G Launch

2008

Operational integration of

Omantel & Oman

Mobile

Acquisition of WorldCall

1980

Establishment of GTO (General

Telecom

Organization)

2004

Establishment of Oman Mobile

1996

Launch of mobile

services

(2G)

1999

Establishment of Omantel

2005

Omantel becomes

public (30%)

+2800 employees

~91% Omanization

Slide 4

Worldcall Telecom

Omantel today

3 business units and 4 supporting units to provide integrated and customer centric solutions

Consumer

BU

Fixed & Mobile

services to

residential

market

Corporate

BU

Fixed, Mobile &

ICT services to

professional

market

Wholesale

BU

National and

international

carrier activities

Integrated

Network &

Technology

Network and IT

services

Finance

Finance, Legal,

Procurement

and General

Services

BDU

Supports

organization

with regulatory,

marketing,

strategy and

M&A activities

HR

Groups all

employee

related function

Subsidiaries

Telecom operator (Pakistan)

57 %

Omania E-Commerce E-Solutions and E-Procurement (Tejari)

49 %

Infoline LLC 3rd party call centre services and BPO

45 %

Oman Fibre Optic Co Manufacturing of optical fiber and cables

41 %

Oman Data Park Tier-3 Data Centre

60 %

Associates

Slide 5

Key Leadership Team

Amer bin Awadh al-Rawas,

CEO

Haitham Al Kharusi

VP Consumer

Lars O Gustafsson

VP Business Development

Samy Ahmed Al Ghassany

VP Integrated Technology

Rao K. Chagarlamudi

Advisor to CEO

Ghalib Saif Al Hosni

VP HR

Talal Said Al Mamari

VP Finance

Todd Dick

VP Corporate Business Unit

Sohail Qadir

VP Wholesale

Key achievements

First to trial LTE-TDD services in Middle East

Voted as Best Telecom Brand in Oman 2011

Completion of successful transformation program and merger

Best Investor Relations award from Middle East Investor Relations

Society in 2009 & 2010

ISO Certification for key services.

Best Performance listed company in MSM

2011: Key Achievements

84 96 102 113

241 227 234 256

87 89 81 83

0

75

150

225

300

375

450

525

2008 2009 2010 2011

Revenue in RO Mn

Fixed Line Mobile Wholesale

411 412 417

453

47% 53%

Nawras

OM

2008

2011

Mobile Market Share Fastest growing mobile operator for the

second consecutive year.

First operator in Oman to reach over 2 million

pre-paid mobile subscribers.

Reversed the mobile market share declining

trend both subscriber / revenue share.

Reversed the mobile number portability

declining trend more Port in since Oct 2010.

Reverse the declining trend in Wholesale

Revenues.

Continued double digit growth in Corporate

Revenues

+ 11% +9% +3%

2,277

259

2,019

276

251

52

- 500 1,000 1,500 2,000 2,500

Mobile All

PostPaid (Mada)

Pre-Paid (Hayyak)

Mobile Broadband

Fixed

Fixed Broadband

Subscribers ('000s)

41% 59

%

YoY Growth

Slide 8

Omantel Domestic Network Coverage

Fixed line household penetration

coverage of 86 % and Fixed

Broadband household coverage of

65%

Fixed coverage

Population coverage of 3G

network stood at 63%

3G coverage: ~ 60%

Population coverage of 2G

network stood at ~97%

2G coverage: > 95 %

Slide 9

Brand evolution

Value Propositions

Slide 11

Consumer:

Something for everyone

Fixed telephony

Mobile Post-Paid

Mobile Broadband

Home Broadband

1234 One number for

Customer Care

60

outlets

200+ Indirect Channels

Bla

ckberr

y

Android SMS Bundles

+2,000,000 Mobile prepaid subscribers

Ha

yyak L

ibert

y

Mob

ile P

re-P

aid

Slide 12

Corporate:

trusted, reliable and credible solution provider

Mobile & Fixed Voice Mobile Broadband Mobile CPN Toll Free Numbers Blackberry

Communication

Services

IP MPLS, ADSL Digital & Internet

Leased Lines, IPLC

WiFi VSAT ISDN

Core & Access

Hosting (Web, Email) Co-Location Data Storage & DRC Unified Communication Hosted Contact Centre

Solutions &

Applications

Corporate value propositions in 3 key domains:

Segmented market focus with 40 year history of delivering tailored solutions to

By a professional Sales team consisting of Sector, Key and Dedicated Account

Managers

Oil & Gas

Services

Finance

Industry

Government

Slide 13

Wholesale:

national & international carrier hub

Submarine Cable

Landings FLAG, Falcon MENA GBI TWA SMW3 EIG

Telehouse Co-Location &

Hosting

Server Management Hosted Data Centers Disaster Recovery Global Interlink Peering Data Backup Hosted NOCs

Terrestrial Cables UAE Saudi Arabia Yemen

National Interconnect and Access Services

Mobile Reseller Services Co-Location National Roaming International Voice Leased Lines

National

538 Mobile roaming partners

50+ International partners Co-Location, Cross

Connect & Transit, IPLC &

MPLS

International

Slide 14

Group Performance

Slide 15

Group Performance Highlights

Group Revenue increased by 8.6% to RO 452.6 Mn.

Domestic Revenues 8.3% (contributed by Fixed 4.5%,

Mobile 9.4%, Wholesale

9.4%).

Worldcall Revenue increased by 6.4%.

13% growth in Corporate revenues.

Net Profit of RO 112.9 Mn.

Maintained Healthy EBITDA of 53% (46% including

Royalty)

Domestic EBITDA 55%. (Including Royalty 48%)

Net profit margin of 25% and increase of 2.3% over last

year.

Group customer base grown by 6%. (from 3.530 Mn

compared to 3.329 Mn - incl

WTL).

Continued robust Mobile Subscriber acquisition Total Market Growth 4.4%, Oman

Mobile achieved growth of

13.2%. 162% of the total

market net additions (Q42011 Vs Q42010).

Growth in both post & pre paid mobile subscriber base (7.8%

and 6.6% respectively) and

mobile broadband by 51.4%.

Impressive Growth Strong & growing

subscriber base Healthy margin

Slide 16


Oman Mobile network subscriber base YoY grown to

2.819 Mn (58.6% Market

share) from 2.491 Mn.

60.8% revenue share* (absolute increase of 1.95%

compared to Dec10).

Fixed line market share is 97% (as of Dec11).

Fixed Line Revenue share 85% *

Debt Ratio is 28%.

Group total assets at RO 709.6 Mn.

Net worth of RO 494 Mn.

Net Asset per share is RO 0.658

Dividend Yield 7.6% (based on closing price of December

2011).

Market Capitalization at RO 0.982 Bn (Dec11).

Price Earning Ratio {P/E 8.80}.

EV / EBITDA 4.12.

Price to Book Value 1.99

Market Leadership Impressive market

fundamentals Strong balance sheet

*Note: Revenue market share is based on estimate, as actual figures are not yet

available.

Slide 17


Omantel supported the Information Technology Authority (ITA) for its National PC Initiative with the objective to increase the ownership and usage of personal computers amongst certain segments (e.g.

social welfare, students and teachers) of the Omani population. Omantel has provided free internet

service upto one year as part of this initiative. Phase II has stated in Sep2011.

During last Ramadhan, Omantel organized its third Ramadhan Charity Campaign reflecting the values of (Give, Share & Care). Around 5000 families in all regions have benefitted from the main activities of

the campaign.

Strong Corporate brand image, Corporate Social Responsibility, Achievements

Group Performance

Analysis

Slide 19

In RO Mn

Three Months ended 31 Dec 2011 Year Ended 31 Dec 2011

2011 2010 Change% 2011 2010 Change%

Revenue 119.5 100.8 18% 452.6 416.6 8.6%

EBITDA 63.4 56.3 12% 238.4 226.5 5.3%

EBITDA% 53% 56% 53% 54%

Net Profit 30.1 27.3 10% 112.8 110.3 2.3%

Net Profit % 25% 27% 25% 26%

Group Customer Base (In Mn) 3.530 3.329 6.0%

Note: EBITDA adjusted to exclude Royalty Expenses. Including Royalty, the

comparative EBITDA will be 46% (Yr 2011) and 48% (Yr 2010)

Performance Highlights

Slide 20

322.0 347.9

64.7

70.8

0

100

200

300

400

2010 2011

Wholesale

Retail

Revenue

416.6

452.6

100

200

300

400

500

2010 2011

2010

2011

Consolidated with Worldcall Group Revenue in RO Mn

Group Revenue continued its growth and achieved overall growth of 8.6%,

while domestic operation achieved a growth of 8.3%

386.7 418.7

Domestic Operation Domestic Revenue in RO Mn

Slide 21

Net Profit and EBITDA Group Net Profit and EBITDA continue to be healthy

Consolidated with Worldcall Group Net Profit in RO Mn

Domestic Operation Domestic Net Profit in RO Mn

110.3 112.9

0

20

40

60

80

100

120

2010 2011

2010

2011115.6 111.5

0

20

40

60

80

100

120

140

2010 2011

2010

2011

198 209 227 238

0

70

140

210

280

2010 2011

Incl Royatly

Excl Royalty 195 201 223 230

0

70

140

210

280

2010 2011

Incl Royalty

Excl.Royalty

48%

54%

46%

53%

50% 48%

55% 58%

EBITDA RO Mn & % EBITDA RO Mn & %

Slide 22

Group Revenue Quarterly Analysis

Group Revenue in RO Mn Revenue by Segment RO Mn

110.6 107.7

97.4 100.8

111.5 111.8 109.9 119.5

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

28.1 24.3 24.2 25.0 27.0 30.0 27.3 28.6

57.6 60.6 55.9 60.2 59.5

64.3 65.6 66.7

25.0 22.7 17.3

15.6 25.0

17.4 16.9 24.2

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

Fixed Mobile Wholesale

Slide 23

OPEX - CAPEX Consolidated OPEX and Capex movement by quarter

Total Opex (incl Depreciation) by Qtr RO Mn & Opex Ratio- % to Revenue

Capex Additions

(Cumulative) RO Mn

10.9

28.0

43.5

75.8

21.4

44.2

65.6

105.0

5.0

20.0

35.0

50.0

65.0

80.0

95.0

110.0

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

75 75 74 73 83 81 80 86

68% 69% 76%

73% 74% 73% 73% 72%

-6%

9%

24%

39%

54%

69%

84%

5

15

25

35

45

55

65

75

85

Q1'10Q2'10Q3'10Q4'10Q1'11Q2'11Q3'11Q4'11

Increase in Opex is mainly due to increase in

employee costs, and depreciation expenses

Capex to Revenue ratio is at 23% which is higher

by 3% than Q32011.

Slide 24

Net profit after Tax NPAT Actual Variance Including Worldcall (Dec'11 Vs Dec'10) OR 2.5 Mn

+ 110.3

+ 4.0 + 25.9

+ 6.1 + 1.9 (3.3)

(8.4)

(11.0) (12.1)

(2.5) (6.7) + 8.5 + 112.9

20

40

60

80

100

120

140

160

Variances (

OR

M)

Slide 25

Cash Flow Net Cash from operating activities at 43% of Gross Revenue.

Cash Flow (Cumulative) RO Mn Assets, Liability & Net worth RO Mn

Note:

1) Operating cash flow before working capital is RO

214.1 Mn which is 47% of revenue.

2) Cash & Cash equivalent exclude Fixed deposit with

banks amounting to RO 83 Mn and RO 10 Mn+ held

for trading.

9

78

138

201

8

76

135

194

14

28

31

23

27

23

21

27

-

30

60

90

120

150

180

210

240

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

Net Op. cash flow Cash & Cash Equiv

680 645 662

686 670 617

657 710

-284 -220 -215 -211 -245

-163 -177 -201

396 425 447 475 425

453 480 508

-350

-200

-50

100

250

400

550

700

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

Total Assets Total Liability Networth

Growth & Market Share

Slide 27

Mobile Market Share Oman Mobile continue to be the leading mobile operator Subscriber market share including mobile resellers (58.6%) and Revenue market share (60.8% Estimate)

Mobile Subscriber Market Share Dec2011 Mobile Revenue Share Dec 11

Oman Mobile,

2,277,481 , 48%

Nawras, 1,933,061 ,

40%

MR (NW), 56,329 , 1%

MR (OM), 542,377 ,

11%

Oman Mobile 61%

Nawras 39%

1) Total Mobile market grew by 4.4% as compared to Q410. Oman Mobile (incl Mobile Resellers) achieved a growth rate of 13.2%, net addition is around 328.2 K, which is around 162% of total net

additions.

2) Compared to Q4 2010, Oman Mobile gained 4.5% subscriber share and 1.95% revenue share (in

absolute terms)

Slide 28

Fixed Market Share Fixed line market share - Subscriber market share (97%) and Revenue market

share (86% Estimate)

Fixed Market Share Dec2011 Fixed Revenue Share Dec 11

Omantel, 278,773 ,

97%

Nawras, 8,550 , 3%

Omantel 86%

Nawras 14%

Total Subscribers Reported 287,323. Omantel including ISDN /WLL subscribers 278,773.

Slide 29

Mobile subscriber base Quarter to Quarter Oman Mobile Subscriber Base

Oman Mobile Subscribers In 000s

With Mobile Resellers In 000s

213 228 232 240 241 247 251 259

1,762 1,849 1,892 1,893 1,827 1,899 1,957 2,019

1,975 2,077 2,124 2,133 2,068 2,146

2,208 2,277

0

500

1,000

1,500

2,000

2,500

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

Post-paid Pre-paid Total

1,975 2,077 2,124 2,133 2,068 2,146 2,208 2,277

288 331 365 358 381 424

479 542 2,263 2,408

2,489 2,492 2,449 2,570 2,687 2,820

50

650

1,250

1,850

2,450

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11

OM MR Total

Slide 30

Subscriber base Fixed Line shows marginal increase in Q4 2011. Combined Broadband Subscribers

recorded a growth of 44%

Fixed Line Subscribers In 000s Fixed & Mobile Broadband In 000s

Note:

1) Fixed line include pre-paid and payphone.

2) As per TRA reporting, total fixed lines are 278,773

based on ISDN equivalent telephone lines

258 257 252 252 242 243 247

251

100

130

160

190

220

250

280

Q1'10Q2'10Q3'10Q4'10Q1'11Q2'11Q3'11Q4'11

42 44 45 45 47 48 49 52

101 120 148

182 213 226

243 276

0

50

100

150

200

250

300

Q1'10Q2'10Q3'10Q4'10Q1'11Q2'11Q3'11Q4'11

Fixed Line Mobile

Note:

1) Mobile Broadband subscribers including Pay As You

Go (PAYG) is estimated at 897 K as of Dec11.

Slide 31

ARPU ARPU / Month for major products / services

Mobile services Fixed line services

Note:

1) Fixed line include post & pre-paid including

payphone.

2) Internet include Broadband and all internet services

(dialup post &prepaid, dedicated)

28.6 27.9 28.7

27.1

10.0 8.2 7.3 7.4

12.6 10.6 9.8 9.7

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2008 2009 2010 2011

Mobile Post Mobile Pre Mobile Blended

15.2 14.5 14.2 13.6

17.0

23.3

28.6

36.8

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2008 2009 2010 2011

Fixed Line Internet

Slide 32

Worldcall Performance Year to date comparison (2011 vs. 2010)

YTD revenues for 2011 posted RO 2.19 mn (6%) {7.2% in PKR}

higher than YTD revenues for

2010.

EBITDA 2011 posted a growth of 2.5 times over 2010. EBITDA

margin soared from 10% in 2010

to 24% in 2011;.

The YTD bottom line posted a net profitability of RO 1.3 mn as

against loss of RO 5.3 mn in

2010.

The Company exhibited a significant operational turnaround as its losses turned

around into profits during the last quarter.

Income Statement

Amounts in RO mln

Actual

2011 2010 Variance

Revenue 36.14 33.95 6%

Operating Expenses (27.41) (30.45) -10%

EBITDA 8.73 3.50 150%

Depreciation and amortization (6.34) (6.96) -9%

Operating Profits/(Loss) 2.38 (3.46) -169%

Finance Cost (2.39) (3.68) -35%

Other income/(loss) 0.47 0.23 106%

Profit/(Loss) Before Taxation 0.46 (6.92) -107%

Taxation 0.86 1.66 48%

Net Profit/(Loss) After Tax 1.32 (5.26) -125%

Key Ratios YTD 2011

2011 2010

Net margin 4% -15%

Operating margin 7% -10%

EBITDA margin 24% 10%

Slide 33

Dr. Amer Al Rawas, CEO

Mr. Talal Said Al Mamari, VP Finance

Mr. P.G. Menon, GM Strategic Finance

Omantel

Finance Division (Investor Relations)

P.O Box 789, Ruwi, Postal Code 112, Sultanate of Oman

Website: www.omantel.om, Email: [email protected]

Presented by

Documents

Omantel Performance 2011-Q4 Final