Earnings call transcript: Ooredoo QPSC reports strong Q1 2025 growth

Ooredoo QPSC reported robust financial results for the first quarter of 2025, with earnings per share (EPS) reaching $0.30 and revenue totaling $5.85 billion, surpassing market expectations. The company’s stock experienced a modest pre-market increase of 1.09%, reflecting investor confidence in its performance and strategic initiatives. According to InvestingPro analysis, the company trades at an attractive P/E ratio of 8.35x and offers a significant dividend yield of 6.8%. InvestingPro data suggests the stock is currently undervalued based on its Fair Value assessment.

Key Takeaways

• Ooredoo’s revenue grew by 3%, excluding its exit from Myanmar.
• The company launched a new data center brand, "Syntis," expanding its technological offerings.
• Strong performance in Iraq, with an 8% increase in revenue.
• CapEx saw a significant increase of 41%, reaching R538 million.
• Plans to increase fintech active users to 3-4 million.

Company Performance

Ooredoo demonstrated solid growth in Q1 2025, driven by strategic expansions and innovations. The company reported a 5% increase in net profit, approaching R1 billion, and a 5% increase in its customer base, now totaling 52 million, excluding Myanmar. The expansion into new verticals, such as the sea cable and fiber markets, and the launch of 5G services in Tunisia, highlight the company’s commitment to enhancing its technological infrastructure and market presence.

Financial Highlights

• Revenue: $5.85 billion, a 3% increase excluding Myanmar.
• EBITDA: R2.5 billion, with a margin of 43%.
• Net Profit: Nearly R1 billion, a 5% increase.
• Free Cash Flow: R2 billion.
• CapEx: R538 million, a 41% increase.

Earnings vs. Forecast

Ooredoo’s actual EPS of $0.30 exceeded market expectations, although specific forecast figures were not provided. The revenue of $5.85 billion also surpassed projections, reflecting the company’s strong operational performance and strategic initiatives.

Market Reaction

Following the earnings announcement, Ooredoo’s stock saw a pre-market price increase of 1.09%, with the price moving from $12.82 to $12.96. This positive market reaction aligns with the company’s robust financial performance and optimistic outlook for the year. The stock’s current price remains within its 52-week range, with a high of $13.6 and a low of $9.105. InvestingPro data shows the stock’s low beta of 0.21, indicating relatively low price volatility compared to the market. Subscribers can access 10+ additional ProTips and comprehensive financial metrics through InvestingPro’s detailed research reports.

Outlook & Guidance

Ooredoo projects a full-year revenue uplift of 2-3%, with CapEx guidance set between R4.5 billion and R5 billion. The company plans to invest $1 billion in long-term data center projects and aims to increase its fintech active user base to 3-4 million. These strategic initiatives underscore Ooredoo’s focus on growth and technological advancement.

Executive Commentary

"We kicked off the year with a solid performance, sustaining operational momentum across our market," said Aziz Aluthman Farru, Group CEO. He emphasized the company’s focus on profitable market share, stating, "We prioritize profitable market share versus absolute market share." Aziz also highlighted Ooredoo’s leadership in the market, noting, "We’re a clear leader in the market and a premier provider in the B2B space."

Risks and Challenges

• Margin volatility in markets like Iraq and Kuwait could affect profitability.
• Competitive pressures in Oman and the Maldives may impact market share.
• Macro-economic fluctuations could influence financial performance.
• The ambitious CapEx plan requires effective financing strategies.
• Regulatory changes in key markets could pose operational challenges.

Q&A

During the earnings call, analysts inquired about margin volatility in Iraq and Kuwait and sought clarity on Qatar’s market dynamics. The company also addressed questions regarding the minority stake in its data center business and outlined its CapEx and financing strategies.

Ooredoo’s strong Q1 2025 performance and strategic initiatives position it well for future growth, despite potential challenges in certain markets. For deeper insights into Ooredoo’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which includes detailed analysis of the company’s financial health, peer comparisons, and expert insights.

Full transcript - Ooredoo QPSC (ORDS) Q1 2025:

Lual Pillay, Head of Investor Relations, Reader Group: Good afternoon, everyone. Welcome to Reader Group’s first financial results call for 2025 covering the three month period ended March 31. My name is Lual Pillay, and I’m the Head of Investor Relations for the group. I’m joined today by Aziz Aluthman Farru, our Group CEO, who will open the session with an update on our strategic progress and a review of our consolidated results. Following that, Abdullah Alzaman, our Group CFO, will provide a deeper insight into the performance of our operations across the quarter.

As always, we will keep the presentation concise to ensure we leave enough time for your questions at the end. Please feel free to submit your questions at any point using the Q and A function in the Zoom webinar. You can follow along with the presentation which is available on both our website, erudo.com and this webcast platform. Please note that the session is being recorded and transcribed. By attending you are giving your consent to being included.

Lastly, I’d like to draw your attention to the disclaimer on Slide two. And with that, I’ll hand over to Aziz to begin the presentation.

Aziz Aluthman Farru, Group CEO, Reader Group: Good afternoon, everyone, and thank you for joining us for our Q1 twenty twenty five investor call. Starting with a brief update on our strategic progress, we’re advancing steadily across all our verticals. Starting this quarter, we are reporting results separately for our data center and fintech businesses, and I’ll cover those in more details in the next slides. On towers, we’re focused on completing closing process across with regulatory approvals being key to finalizing the consolidation. For our sea cable and fiber vertical, we contracted Alcatel submarine networks to build a high capacity system connecting all GCC countries and beyond.

Recent milestone in the quarter include securing Kuwait’s First FIG lending point through SITRA and finalizing a lending agreement with Iraq’s ITPC. This is the first time we are reporting figures in this way after our data center business entered a new chapter with the rebrand to Syntis, which is well positioned to accelerate the region’s digital transformation. We have 13 active data centers across Qatar, Tunisia and Kuwait and an additional data center in construction. In Q1, we have seen revenue at BRL 35,200,000.0 and EBITDA at BRL 13,400,000.0. Nearly 65% of revenues in Qatar was driven by hyperscaler customers, underscoring our strong positioning in the segment.

IT capacity increased by 25%, highlighting strong and growing demand for our data center services. In the quarter, Iron Mountain acquired a minority stake in Syntis, providing expertise to accelerate the company’s growth. In the long term, we aim to deploy $1,000,000,000 of planned investment and scale our operation to 120 megawatts capacity. Turning to our fintech vertical. We have generated over BRL 22,000,000 of revenue, largely driven by international remittances.

In our home market of Qatar, our most mature and established fintech market, we are performing well and are processing over $6,000,000,000 worth of transaction and holding a market share of 20% in the international remittance. Looking at EBITDA, Qatar’s profitability is being offset by losses in other markets, which are still in the build phase, mainly Oman. Our CapEx spend in the fintech vertical was just over R16 million dollars reflecting our increased investment in our less mature fintech markets. These are currently in the buildup phase and are developing nicely. We are also progressing towards market entry in Tunisia, Iraq and Kuwait.

We have developed partnership globally, including with household names such as Viadat, PayPal and Qatar National Bank. Over the long term, we aim to increase our active user base to 3,000,000 to 4,000,000. We will achieve this by scaling our fintech offering and leveraging existing telco customers now adopting our services, while also exploring to expand into greenfield opportunities and new markets. We kicked off the year with a solid performance, sustaining operational momentum across our market. On a year on year basis, excluding the impact of our exit from Myanmar operation, revenue increased by 3% and EBITDA grew by 2%.

EBITDA margin remained strong at 43%. Net profit increased by 5%. We also maintained a healthy balance sheet with a leverage ratio of 0.6x. Turning to revenue. We delivered revenue of R5.8 billion dollars Excluding the impact of the Myanmar exit, revenue grew by 3% on the back of strong operational growth in Iraq, Algeria, Tunisia and Kuwait.

In Oman, we saw high level of competition from peers in the market. Qatar was impacted by lower device sales, nonrecurring revenue from the AIC tournament in Q1 of twenty twenty four and a data center carve out. In Maldives, there was elevated competition in the prepaid market, and macroeconomic pressure affected Palestine’s performance. Turning to EBITDA. EBITDA reached 2,500,000,000.0 for the quarter.

Excluding the impact of Myanmar’s exit, we delivered a 2% EBITDA uplift. EBITDA margin was maintained at a solid 43%. Kuwait, Algeria and Iraq increased their contribution towards the group profitability. EBITDA in Oman and Palestine was mainly affected by the softer top line performance, while Qatar was impacted by nonrecurring revenue from the AFC tournament in Q1 of twenty twenty four and the data center carve out, as mentioned earlier. On the net profit, we delivered a healthy growth for the first quarter of 5%, reaching just shy of 1,000,000,000.

It’s important to highlight that net profit now reflects the initial impact of Pillar two, amounting to million dollars in line with the new global minimum tax requirement. On a normalized basis, net profit decreased by 4%, with Q1 twenty twenty four including foreign exchange effects from Myanmar’s operation. Looking at CapEx, we continue to invest strategically for strong long term returns. We deployed R538 million dollars of CapEx in the first quarter. The 41% increase was driven by higher investment in Iraq, Oman, Kuwait, Algeria and Tunisia to enhance and expand our infrastructure.

We added a CapEx by segment chart to the slide. And as you can see, the bulk of our investments continue to be focused on networks to strengthen our capacity and reliability to meet rising demand and support the ongoing digital transformation. The group’s free cash flow was a healthy R2 billion dollars The decrease of 8% was mainly due to accelerated CapEx spend on these projects. Excluding the impact of Myanmar exit, group customer base increased by 5%, bringing our total consolidated customer base to 52,000,000. Including IOH, we recorded 147,000,000 customers.

We saw a slight decrease in our customer base across three markets. In Qatar, Q1 Of Twenty Twenty Four included AFC tournament related connections. In Oman, customer level were impacted by a base cleanup. And in Tunisia, the customer base was impacted by new regulation and improved quality of acquisition. Now let’s discuss the strengths of our balance sheet.

The chart shows that we have a healthy financial position with low debt levels. Our gearing is low at 0.6x and below our Board guidance. We maintain a strong liquidity of around 5,500,000,000.0, circa $1,500,000,000 equivalent in undrawn committed facility, mainly in USD at the group level. Our debt profile is balanced with long term maturity and minimal interest rate risk. Both S and P and Mubis affirm our investment grade rating.

Looking at how we are tracking against our full year guidance. Revenue grew by 3%, excluding the impact of the Myanmar exit, putting us on track to meet our guidance of 2% to 3% revenue uplift. Our EBITDA margin for the first quarter aligns closely with forward year 2025 guidance, highlighting our focus on driving efficiency and maintaining financial discipline. We spent just over R530 million dollars in CapEx and will continue to invest strategically, keeping us on course to meet our guidance range of R4.5 billion to R5 billion dollars To conclude, Oridu delivered solid results over the first quarter of the year, and we are well positioned to continue our growth. We remain focused on executing our clear strategy and delivering value to our stakeholders.

And on this note, I leave it to Abdullah to take you through the operational review. Thank you.

Abdullah Alzaman, Group CFO, Reader Group: Thank you, Aziz. Good afternoon, everyone. I will take you through our operational performance for the first quarter of twenty twenty five. Starting with our home market, Qatar, the operation delivered a solid financial performance despite the competitive market condition. Revenue decreased by 4% due to lower device sale, the impact of the data center carve out and the nonrecurring revenue from AFC Tournament in quarter one twenty twenty four.

Normalizing for the AFC Tournament and the data center carve out impact, revenue decreased by 2% and EBITDA remained flat year on year. Ongoing operation efficiency led to improved EBITDA margin of one percentage point, reaching a strong 53%. Customers decreased by 3% to GBP 3,000,000 due to the inclusion of AFC related connections and the basis in quarter one twenty twenty four. Moving to Kuwait. The operation continued to deliver a healthy performance across all metrics.

Revenue increased by 1%, driven by higher service revenue from voice, data and digital revenue streams. EBITDA increased by 51% with an improved EBITDA margin of 34, up by 11% points. EBITDA growth was supported by higher service revenue and lower operating expenses. The first quarter of the prior year included one off bad debt provision. Normalizing for this one off provision, EBITDA increased by 13%.

The customer base increased by 2% to 2,900,000. Turning to Herman operations. We continue to operate in a high competitive market. Revenue decreased by 3% mainly due to lower service revenue. Despite the ongoing market competition, Oroodo Oman sustained mobile service revenue year on year.

Pressure on the top line led to a 7% reduction in EBITDA, while the EBITDA margin was solid at 44%. The operation recorded 3,000,000 customer on its network for the quarter. We expected a new five gs initiative and expanded coverage to help stabilize performance in Oman during year 2025. In Arab, Asia sale maintained its strong growth moment, driven by an expanding customer base and raising data demand. Revenue increased by a strong 8%.

EBITDA grew by 5% with a solid EBITDA margin of 45%. The customer base grew by 9% to 19,700,000. In Algeria, we continue to see double digit growth as the operation continued to build on a strong progress made in the previous quarter. Performance was supported by strategic investment in network expansion and digital transformation. Both revenue and EBITDA increased by 12% with a stable EBITDA margin at 42%.

The customer base grew by 7% to 14,500,000. Moving to Tunisia. In the first quarter, after issuance of five gs license, Orido Tunisia launched its five gs product and services, responding to the strong market demand for five gs fixed wireless access. Revenue increased by 4% in local currency, supported by mobile and fixed segments. EBITDA increased by 1% in local currency as the top line growth was offset by higher operating expenses.

EBITDA margin stood at 39%, and the customer base reached 6,900,000 by end of the first quarter. In Maldives, the business maintained strong cost discipline. Revenue decreased by 1%, impacted by competitive on the prepared market. Operation efficiency contribute to EBITDA increase of 1% with an EBITDA margin improvement of one percent point to 55%. The customer base expanded by 5% with the five gs network now reaching 80% of the population.

Moving to Palestine. I want to thank our in country colleagues again for their ongoing efforts to keep customer connected. The team restored coverage across most densely populated areas in Gaza, increasing the number of active site by over 50%. Our customer base grew by 6% and stood at 1,500,000 customer. On a reported basis, revenue and EBITDA decreased by 34%, respectively, due to the impact of macroeconomic pressure.

EBITDA margin stood at 38%. Finally, our joint venture, IOH, published their result for the first three months of 2025. The performance was impacted by increasing competition on the market. Revenue declined by 2% and EBITDA was down by 1%, while EBITDA margin increased slightly by 0.5 to a solid 47%. This concludes the operational review.

Back to Lule. Thank you very much.

Moderator, Reader Group: Thank you very much, Aziz and Abdullah. We have now reached the Q and A segment of today’s call. Here’s how you can participate. Please raise your virtual hand and I will unmute your line when it comes to your turn. Alternatively, you can type your questions in the Q and A box if you prefer.

For session, I’m joined by senior leadership team together with Aizid and Abdullah. We have Iyaz Asab, our deputy group CFO and head of strategy, Renee Berger. Our first question comes from Maggie Singh. I’ll unmute your line shortly. Yeah.

Mehdi Singh from HSBC. Please go ahead, Mehdi.

Mehdi Singh, Analyst, HSBC: Yes. Hi. Thanks for taking my questions. I have two questions. First is on margins.

In couple of markets, margins have been quite volatile during the period. Like, if you look at the previous two, three quarters, specifically Iraq and Kuwait, If you could, you know, help us understand how should we think about the normalized run rate of margins in these markets? How should we, you know, think about the q four margin as well? Because that has been quite volatile in past. So if you could talk about that, that will be very helpful.

And then second question is around Iraq. Is there any update on the five g process? And when you you have a, I think, dispute between the regulator and the third operator, is there any resolution insight? And is the five g license for yourself dependent on such a resolution, or is it would it be independent of that? Thank you.

Finance Team Member, Reader Group: Okay.

Aziz, Group CEO, Reader Group: You. Shant, I was just going to do some general comment. So maybe a couple of comments is Q4 generally has some seasonality towards it. When you look at Iraq, in particular, Q1 this quarter, we had a bit of additional OpEx versus regular quarters due to a couple of things. One is especially the shutdown of CoreX Internet capacity.

So that shifted quite a lot of volume to our network, which is a positive, but we had to incur some additional OpEx to sustain the traffic flow and to try to attract as many customers as we could to retain these customers. Also, we’re trying future proof our network in the event of the launch of the third operator Vodafone with five g. So this is why there’s a bit of fluctuation in terms of the margin in Iraq, but I will leave it to my finance colleagues for more details.

Finance Team Member, Reader Group: Yeah. And from Kuwait, we had also one bad debt one off for the 2024, and I think in regards to that, there is about 13% increase on the the margins. But we’ve seen or we’re noticing a solid performance in Kuwait, so I don’t see any concern on the margin for Kuwait. In regard to Arab update on term of the fourth operator in Arab, I think we have assured the update as we had on the last event or on the last investment calls. So we know that they have been a port of a license.

And till that day or till today, we do have any inside informations.

Aziz, Group CEO, Reader Group: We know that they signed a joint agreement with Vodafone. With Vodafone, their their the public stance has a launch towards the end of this year. How feasible it is is still uncertain for us, but we’re preparing preparing all mitigation plan, especially given the importance of the Iraq market for us.

Moderator, Reader Group: Thank you, Aziz and Abdullah. Our next question comes from Nishit Lakotia from Sikul Bank. Go ahead, Nishit.

Nishit Lakotia, Analyst, Sikul Bank: Yes. Thanks for the opportunity. I I have couple of questions. First, on the operations in general, in Qatar, we’ve if you if you look at your competitor, they they have been able to grow their revenues and all. And even if you remove the distortion of the data center carve out, Qatar operations look relatively weaker than what your competitor has been doing.

Doing. So when when do we see this in stabilizing for Uredo in terms of we can see some growth in in your home market? And secondly, also on The Maldives, we’ve seen that the operations were weaker than what your competitors have done in terms of growth. So first is how how, you know, how you dealing with that, competitive situation, and, how is there an issue with upstreaming cash from Maldives? Because it seems like the charges are quite, steep to upstream dollars from Maldives.

So, yeah, are you facing any issues in that aspect? So maybe, yeah, just these two for now.

Aziz, Group CEO, Reader Group: So maybe touching on Calturn versus our competitor, we try to segregate service revenue market share versus actually mobile market share. And in terms of service revenue where it’s hard to to segregate what is it because we know this wholesale numbers, etcetera, was extremely low margin. When we look at the mobile market share, we’re actually quite stable with our competitor. There is the market in Qatar is barely growing, if not flat, and on this, we’re retaining our position. Also, we benefit as a premium telecom operator on quite a significant ARPU differential versus our competitor, and it’s natural, especially when you are in a position like us where we have close to 70% market share, that there is some slight ARPU dilution for us and some slight ARPU accretion for the competitor.

I think this is where you’ll see the difference versus our competitor in Qatar. When it comes to The Maldives, there’s been quite extreme competitive pressures there. Duragua has been quite aggressive. What we prioritize is profitable market share versus absolute market share and EBITDA market share. This has always been the core for the last four years of our focus is really focusing on EBITDA market share and profitable revenue versus absolute revenue, and that’s what’s also been driving the constant growth in our bottom line, which I think is what matters to our shareholders.

Coming to your last question, upstreaming of capital from The Maldives. Yes. Upstreaming from The Maldives is quite costly at the current moment as Maldives is facing some foreign currency issues.

Nishit Lakotia, Analyst, Sikul Bank: Okay. I’m sorry. If I can just one more quick one. It’s a long shot, but I just would you be open to sharing at what valuations have Iron Mountain taken stake in your data center spin off? Because assume they’ve not contributed in cash.

They’re bringing in their own expertise, and they’ve got a stake into that for that. So anything you can share on that?

Aziz, Group CEO, Reader Group: No. So, actually, Iron Mountain valuation Arjun, Iron Mountain’s investment is a cash investment. It’s not a sweat equity or contribution in equity. They actually bought a stake. It’s a two stale, as you know, it’s a two stage deal.

That’s the entry, point. And for regulatory purposes, now they’re coming just in a circle, which manages the data centers, manages the commercialization, the design and build, but actually doesn’t have a direct stake in the assets. We’re trying to learn our lessons from the regulatory environment with the telco, so trying to build a buffer into this. And once we get all the regulatory approvals for the roll up of the assets, Iron Mountain has then the option to convert into the asset levels. If you look at the blended multiple, we’re looking for both tranches, we’re looking at mid to high 20s multiple.

Nishit Lakotia, Analyst, Sikul Bank: Understood. Thank you so much.

Moderator, Reader Group: Thank you, Nishik. We have a few typed questions. So our first question is from Rohan Shaker. Are we expecting a decline in free cash flow for FY 2025 due to increasing CapEx? And is the guided CapEx the new run rate going forward for FY ’20 ’20 ’6 and FY 2027?

Aziz, Group CEO, Reader Group: So in terms of guided CapEx, the guidance we gave at the beginning of the year is the same one we’re sustaining right now. If you break up our CapEx into two buckets, you have the core telecom operation. What you’re seeing is that our run rate CapEx is actually stable on the core telecom, and we’re running at, I think, correct me if I’m wrong, 14% CapEx to sale ratio, something like four. Between 1316%, I’ll I’ll let my colleagues correct me. But with this is our main point of guidance.

Despite having certain markets like Tunisia where we just launched five g, which will drive a slight peak of CapEx for that market at the be for the beginning of this year. The bulk of the additional CapEx is coming from our adjacencies. As you know, we announced on the FIG cable and the buildup of our international connectivity with the on the sea cables. Most of the CapEx will be spent towards the end of twenty twenty five and beginning of twenty twenty six. And then also on the data center side, we’re building an additional data center as we speak.

We’re working on expansion of existing facilities because we’re running at 99% occupancy, and this will have some CapEx, but just attributable to the data center business for which we actually raised half a billion dollars of the facility around eight months ago.

Moderator, Reader Group: I think you’ve touched a bit on the CapEx, but and is asking, how is how is the remaining CapEx plan to be spent? How are you planning on financing the remaining 4 to 4 and a half billion? Any plans for new bonds issuance?

Aziz, Group CEO, Reader Group: I’m sorry. I didn’t listen to it.

Finance Team Member, Reader Group: I’m sorry. Yeah. Yes. In term of financing, I think we are in a very good positioning and cash positioning, And we already have made the financing at the beginning or late last year for 500 millions. And our priority today and how we’re going to spend the CapEx, I believe, as you have mentioned that already.

There is on our core, and the rest of it approximately, let’s say, 1,600,000,000.0 will be part within the data center, and the risk of expansion in term of the c cable fintech. This is covering, I hope, the questions.

Moderator, Reader Group: Thank you for that. Our next question comes from Alexander David from Ashmore. Two questions from me. Number one, can you talk a bit more about the consumer landscape in Qatar in terms of what you are seeing in customer growth? That’s the first part.

And the second one is, you talk about competition in Qatar market? You have spoken about targeting value market share. What is your strategy here?

Aziz, Group CEO, Reader Group: So in terms of Qatar, I think my colleagues in Korea, we’re seeing moderate growth versus other markets like Iraq, Nigeria, Tunisia, or even Kuwait where we’re seeing double digit growth or in the case of Kuwait, we’re seeing very high single digit growth. Qatar, we’re seeing very moderate growth in terms of the general market. We’re seeing, I think, 1.1%, something like this. In terms of general growth of the market, of course, we’re trying to capture the lion’s share of the market. The positioning of Veridu has been to focus on the high value customers.

This has always been our positioning, and we’re a clear leader in that market. We’re also a premier provider in the b to b space and in the premium segment, and that’s our core positioning in Qatar is to be the premium quality provider of the market.

Moderator, Reader Group: Thanks, Satish. The next question comes from from HSBC. It’s four questions. I’ll ask them one by one. When do you expect to receive cash proceeds from Zane Group for asset equalization process related to the tower JV?

Early estimates was circa $500,000,000, but revised after IHS Kuwait transaction. Can you give any idea about the revised amount to be received?

Aziz, Group CEO, Reader Group: So for the tower transaction, it’s a bit like for those that have been following us for a while, it’s a bit like the Myanmar closing of the transaction, we kept pushing back, but we got done on time, and we received the proceeds. This is the same thing. We’re waiting for regulatory approvals. These are very lengthy processes in the jurisdictions we operate as. The core jurisdiction, which is Qatar, has never had a tower transaction before.

We would be the first tower company with Zane, and therefore, there’s quite a few regulatory hurdles we’re passing through. We’re going through that process methodically. As soon as we’re able to clear that process, we will then close Qatar in the subsequent markets then after. In terms of the proceed waterfall, it hasn’t changed. It the waterfall itself hasn’t changed.

Of course, the value and equalization payments do value because our network does not stand still. We’re building additional capacity as our market grows, and therefore, the additional the equalization takes into account additional build out.

Moderator, Reader Group: Okay. And on IOH, what are the key drivers behind weakness at IOH? Do you still expect the same synergies as guided earlier?

Aziz, Group CEO, Reader Group: So in terms of IOH, first, I think they had or they have their call?

Moderator, Reader Group: They had it.

Aziz, Group CEO, Reader Group: They had it.

Moderator, Reader Group: They had

Aziz, Group CEO, Reader Group: it. So there’s no restrictions. Okay. Just trying to to make sure we’re not talking in terms of disclosures. In terms of look.

In terms of recurrent synergies, we’ve achieved around $400,000,000 of run rate recurrent synergies, nearly a year and a half ahead of schedule. So we were at the top range of our, synergy benchmark and at the lower range in terms of timing. So we’re extremely happy, these synergies are not eroding or disappearing. What we are seeing is quite more aggressiveness in the market in terms of customer acquisition, which usually drives part prices down and cost of acquisition up. This is what has been driving the softness for the last two quarters.

We’re starting to see some stabilization, and we’re monitoring this very carefully.

Moderator, Reader Group: I think you’ve touched on DC, but I’ll ask the question. Can you give some idea about minority stake sale of data center unit to and how much stake sold and valuation, etcetera?

Aziz, Group CEO, Reader Group: So I I think I already answered that.

Moderator, Reader Group: And then the CapEx guidance, DC expansion, we’ve already covered. Nick from Nikhil Bhutan, I’d like to know why there’s been a reduction in prepaid segment in terms of customer base in Qatar given that q one twenty twenty five usually associated with the tourist season?

Aziz, Group CEO, Reader Group: So yes and no. It’s usually associated with the tourist season. What we had last year in q one of twenty twenty four was the AFC, the football cup, which which drove, as you can imagine, as it’s tourist, it’s mostly prepaid growth in q one, which we clearly know we clearly explained in our known numbers were part of the reasons where q one of this year was slightly weaker than last year. That being said, I think actually the AFC this year is in Arabic. Yes.

It’s January 26. Yeah. So it’s next year. Yeah.

Moderator, Reader Group: Okay. From Mohit, hi, team. Thanks for the presentation. My question is with respect to data center revenue growth. How does the growth look versus q one twenty twenty four?

Also, going forward, how much revenue could grow in the medium term two to three year?

Aziz, Group CEO, Reader Group: So, look, this is the first time we’re showing this stand alone numbers, so I think you should take it as a benchmark. In terms of revenue growth, as a rule of thumb, right now, we’re really operating at close to, if not maximum capacity. We’re at 9099% utilization rate. So there is very little room to grow without adding any additional capacity. We are working on plans to add some capacity during this year, especially

Aziz Aluthman Farru, Group CEO, Reader Group: in

Aziz, Group CEO, Reader Group: Qatar, but to witness significant revenue growth, you first need to wait for usually what is eighteen to twenty four months build out period. But we’re currently working on plans to add some incremental capacity during this year and early next year so that we can fulfill the demand in the local market. And we have the same problematic in Kuwait, by the way.

Moderator, Reader Group: Thank you, Azi. We’ve covered all the questions. I don’t see any more questions. K. Since there are no further questions, I’d like to thank you for joining today’s call.

Oulu Group’s next results release, which is our half year results, will be expected at the July or early August. If you have any follow-up questions, please reach out to the Investor Relations team. Thank you once again for joining our call. We look forward to connecting with you soon. Thank you.

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