Vodafone Qatar

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(QAR mn)(QAR mn)Global Research - QatarVodafone QatarEBITDA BreakevenWith positive EBITDA of QAR1mn in 3Q10-11, the company's EBITDA loss declined to QAR30.9mn in 9M10-11 fromQAR185.8mn reported in 9M09-10. The company’s operations turned EBITDA positive one quarter ahead of management’sexpectations. Management forecasts operations to report positive EBITDA on a cumulative basis by mid-2012 (calendar year).We expect Vodafone Qatar to turn EBITDA positive on a cumulative basis in FY2011-12. We expect EBITDA to increase atFY2011-12 to FY2013-14 CAGR of 45.3%.Capex and Cash Flow ForecastBased on our financial model we estimate Vodafone Qatar to achieve positive cash flow in FY2012-13. The company’s capexwas QAR235mn for 9M10-11 and management stated that capex for 4Q10-11 is estimated at QAR57mn. Capex relating tonationwide fixed-line deployment (under the National Broadband Network) are yet to be determined. However, managementexpects long-term capital expenditure expected to stabilize at 8% of revenue from 2013 onwards. We estimate Vodafone Qatar toachieve positive FCF in FY2012-13.500400Free Cash Flow Forecasts300200100-(100)(200)(300)(400)likely to achieve +ve cash flow2010-11e 2011-12e 2012-13e 2013-14eSource: Global ResearchOperations likely to achieve positive bottom-line in FY2013-14In 3Q10-11, the company reported a net loss of QAR144.4mn which declined by 1.2% YoY and 12.1% QoQ. We estimateVodafone Qatar’s bottom-line to remain negative till FY2012-13. We forecast the company to report net loss of QAR594.9mn inFY2010-11, QAR386.3mn in FY2011-12 and QAR166mn in FY2012-13. The operations are likely to achieve positive bottom-linein FY2013-14 with estimated full year net profit of QAR23mn.Net Profit Forecasts100.02010-11e 2011-12e 2012-13e 2013-14e-(100.0)(200.0)bottom-line likely to turn +ve(300.0)(400.0)(500.0)(600.0)(700.0)Source: Global ResearchMarch - 2011 12
Global Research - QatarVodafone QatarFinancial StatementsBalance SheetVodafone QatarQAR mn 2008-09 2009-10 2010-11e 2011-12e 2012-13e 2013-14eCash & cash equivalents 1 85 63 65 78 350Trade & other receivables 26 118 225 258 314 344Inventories 5 22 21 31 44 52Current assets 31 225 309 353 435 746Prepayments 5 4 7 8 9 11License cost - 7,716 7,726 7,726 7,726 7,726Amortization - (369) (772) (1,175) (1,578) (1,981)License cost (net) 7,716 7,347 6,954 6,551 6,148 5,745Property, plant and equipment 389 913 1,260 1,531 1,695 1,857Accumulated depreciation (1) (81) (225) (375) (534) (699)Net property, plant andequipment389 832 1,035 1,155 1,161 1,158Non-Current Assets 8,110 8,183 7,995 7,714 7,318 6,913Total Assets 8,141 8,409 8,304 8,068 7,753 7,659Short-term Borrowings 35 - - - - -Trade & other payables 3,166 364 563 584 436 438Current Liabilities 3,201 364 563 584 436 438Long term debt - 379 670 798 798 678End of employee benefits 0 2 2 2 2 3Provisions 0 5 5 5 6 6Total Liabilities 3,201 750 1,240 1,390 1,241 1,124Share capital 5,072 8,454 8,454 8,454 8,454 8,454Reserves (133) (795) (1,390) (1,776) (1,942) (1,919)Total Shareholders' Equity 4,939 7,659 7,064 6,678 6,512 6,535Total Liabilities &Shareholders' Equity8,141 8,409 8,304 8,068 7,753 7,659Source: Company Reports & Global ResearchThe company's Financial Year ends in MarchMarch - 2011 13
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