Annual Report 2020 Digital Diversity for a New Era
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Annual Report 2020 Digital Diversity for a New Era Ooredoo Q.P.S.C | West Bay, PO Box 217, Doha-Qatar | T: +974 4440 0400 | www.ooredoo.com His Highness Sheikh Tamim Bin Hamad Al Thani Amir of the State of Qatar “In the Name of Allah Most Gracious Most Merciful.” Annual Report 2020 Contents Chairman’s Message 6 Key Moments of 2020 20 Corporate Governance Report 48 Managing Director’s Message 8 Awards and Industry Independent Assurance Report Recognition 24 on Compliance with Qatar Financial Markets Authority Laws and relevant legislations 70 Independent Assurance Report on Internal Control over Financial Reporting 72 Board of Directors 10 Our Social Responsibility 74 Creating Our Businesses 26 Financial Review 80 Ooredoo Qatar 28 a digital Indosat Ooredoo 30 Ooredoo Kuwait 32 Operational and future Financial Highlights 12 Ooredoo Oman 34 Asiacell Iraq 36 Consolidated Financial Statements 84 Ooredoo Algeria 38 Independent Auditor’s Ooredoo Tunisia 40 Report 86 Ooredoo Myanmar 42 Our Assets 14 Consolidated Statement of Profit and Loss 92 Ooredoo Palestine 44 Our Reach 16 Consolidated Statement Ooredoo Maldives 46 Our Strategy 18 of Comprehensive Income 93 Consolidated Statement of Financial Position 94 Consolidated Statement of Changes in Equity 96 Consolidated Statement of Cash Flows 98 Notes to the Consolidated Financial Statements 100 Ooredoo Annual Report 2020 Chairman’s Message Strong foundations for success “This was a year unlike any other, which disrupted lives and challenged organisations. We can be proud that Ooredoo was ready to manage the impact of a shock like the global COVID-19 pandemic, and responded quickly, resolutely and with determination to keep our customers connected and enrich their digital lives.” H.E. Sheikh Faisal Bin Thani Al Thani Chairman 4 Ooredoo Annual Report 2020 5 Chairman’s Message Resilient operations in 2020 platform for home students, Ooredoo development and enhancement of Kuwait’s free data and call offer for partnerships that will allow us to build Operations were impacted by the government workers and Asiacell Iraq’s leading digital services. Ooredoo Algeria’s COVID-19 pandemic during the year. data bonus and extended validity all success in launching a new digital Supporting our However, our balanced portfolio of ensured that people could stay connected. portfolio and video-on-demand platform assets and clear focus on digital services Ooredoo Palestine upgraded its support during the year and the customer growth enabled the Ooredoo Group to mitigate for educational institutions so that they of Ooredoo Myanmar’s ‘My Ooredoo App’ customers in negative impact and maintain stability. could continue to provide lessons for are two recent examples of our ambition children stuck at home. in this area. Across our footprint, data Revenue declined by 4% year-on-year to traffic has risen throughout 2020 and challenging times QR 28.9 billion in 2020, due to the effect Equally, in North Africa, Ooredoo Algeria’s more customers are moving towards of pandemic restrictions which caused a provision of free access to the Ministry of digital channels, suggesting we are well reduction in handset sales and roaming Health’s COVID-19 portal and Ooredoo on track to realise strong success from business, as well as macroeconomic Tunisia’s network support for hospitals this strategy in 2021. weakness in some of our markets. and quarantine centres provided vital This was partially offset by growth in lifelines for their communities. In Dividends Indonesia, Myanmar and Palestine. Indonesia, Indosat Ooredoo accelerated its network rollout plan to ensure In line with our stated dividend policy and EBITDA declined by 6% year-on-year resilience and improve uptime, while in light of the unique challenges of 2020, “The foundations we have built over time supported to QR 12.1 billion in 2020, impacted Ooredoo Myanmar supported the the Board has decided to recommend to by lower revenues and challenging development of a digital app to support the General Assembly the distribution of a not only the introduction of new digital services, market conditions across most markets. volunteers trying to prevent the spread cash dividend of QR 0.25 per share. but also ensured that people stayed connected and The company maintained its focus on of the disease and Ooredoo Maldives digitalisation and cost optimisation, which worked with the Ministry of Education to The Board and Governance engaged throughout this turbulent period.” has been reflected in a healthy EBITDA provide free data and easy access to key margin of 42% for FY2020. e-learning portals. In closing, I offer Ooredoo’s sincere gratitude and appreciation to His Group Net Profit attributable to Ooredoo Ensuring safety was our highest priority. Highness Sheikh Tamim Bin Hamad Al shareholders decreased by 35% year-on- The majority of Ooredoo employees Thani, the Amir of the State of Qatar, for Dear Shareholders, for the creativity, collaboration and year to QR 1.1 billion in 2020, mainly due worked from home for a proportion of leading our nation through a challenging professionalism that enabled Ooredoo to lower EBITDA and one-off gains in 2019 the year, as we took steps to ensure that year and ensuring we emerge stronger, 2020 was a year unlike any other, when to enhance our networks and update our from the Indosat Ooredoo tower sales. they remained safe and were equipped more resilient and more united than ever communities around the world faced services to meet heightened demand Data revenues account for more than with the tools they needed to support our before. Ooredoo’s greatest asset is the unprecedented challenges as a result during 2020. The foundations we have 50% of total revenue, driven by our data customers. Productivity, engagement and support of our home country, and we are of the COVID-19 pandemic and the built over time supported not only the leadership and digital transformation innovation have all remained at high levels proud to have grown even closer to our subsequent global disruption. Families introduction of new digital services, initiatives across the companies in which throughout this period as a result of our community through the trials of 2020. were separated; businesses were forced but also ensured that people stayed we operate. proactive management and investment I would also like to thank the Board to find new ways of working or suspend connected and engaged throughout this in digital workplace tools. Equally, we Members for their insight and leadership operations; schools were closed; and life turbulent period. Ooredoo Group maintains healthy cash took the decision to temporarily close and particularly our employees, who as we knew it underwent intense change. reserves and liquidity levels, with a solid some retail outlets at the beginning of the have worked so hard and given so much For Ooredoo as an organisation, 2020 net profit of QR 1.1 billion. pandemic, reopening gradually so that during the year. It was a year when our core promise – to was also a period of significant change. I we could ensure the highest standards of enrich the digital lives of our customers was honoured in March to succeed H.E. Managing the impact of COVID-19 hygiene and social distancing. However, In conclusion, Ooredoo has been – took on a new level of relevance. For Sheikh Abdulla Bin Mohammed Bin Saud our online and digital channels have through an historic year, and emerged organisations that required significant Al Thani in the role of Chairman of the Across the GCC, in markets such as Qatar, proved to be more popular and accessible with positive expectations for the numbers of employees to work from Board of Directors. Under his leadership, Kuwait and Oman, we saw subdued than ever before. coming period. We have proven that our home, Ooredoo networks provided a Ooredoo was transformed through market conditions resulting from networks can expand to meet the highest vital lifeline to ensure business continuity restructuring and regional expansion, lockdowns and fluctuating energy prices. Updating our strategy for a new era levels of demand and keep pace with the and remote productivity. For schools and I have been consistently impressed In North Africa, Algeria and Tunisia both progressive evolution of the underlying and universities, Ooredoo services by the strength of the teams he built saw declines in tourism and oil production As the long-term impact of COVID-19 technology. The Ooredoo Group and its enabled education to continue online. and the clarity of purpose he instilled that resulted in a contraction in GDP. In became more apparent, we took the operating companies continue to work Communication between families and across the company. Ooredoo’s success in Southeast Asia, markets such as Indonesia opportunity to review our operations and together to learn, adapt and develop new friends migrated to video chats, made serving our customers and going above and Myanmar saw intense demand look for ways to mitigate the anticipated products and services that delight our possible by the hard work of Ooredoo and beyond their expectations during for broadband network improvements reduction in revenue. customers. Our leadership team is ready engineers across our footprint. Even this unprecedented year is a remarkable to support greater connectivity as a and able to manage costs and maintain our entertainment options took on reflection of his legacy. significant proportion of the population In particular, we prioritised cost our market leadership. heightened importance, as our rich worked, studied and socialised remotely. optimisation initiatives and the portfolio of content provided a welcome Looking ahead, we are confident that development of new distribution We are proud of our work during this distraction during difficult times. For Ooredoo is well-positioned to thrive and Every Ooredoo operation responded channels, leading to the development year, and proud to present this Annual many, digital lives became the most grow as the world recovers from the quickly and effectively to support our of our revised strategy for 2021.