Good afternoon, everyone. Welcome to Ooredoo Group's Financial Results Call for the First Nine Months of 2026. My name is Ali Serdar, Head of Group Treasury and Investor Relations. Thank you for your attendance today. I am joined by our Group CEO, Aziz Aluthman Fakhroo, who will start with the highlights of the period, strategic progress, and group results. After that, our Group CFO, Abdulla Al- Zaman, will walk you through the performance of our operations. We will keep the presentation short so we can leave enough time for your questions.
You can submit your questions at any time using the Q&A function. The presentation is available on our website and on this platform. Please note that this session is being recorded and transcribed. Finally, please refer to the disclaimer on slide two.
With that, I will now hand over to Aziz.
Good afternoon, everyone, and welcome to our results call. Let me start with a brief overview, then cover our strategic progress and group results in more detail. The first nine months of 2026 were another period of solid delivery for Ooredoo. Growth was broad-based, with revenue increasing across seven out of eight markets and customer growth across most of the portfolio. EBITDA grew faster than revenue, and margin expanded on the back of cost discipline and better revenue mix. Cash generation also strengthened, with a strong increase in free cash flow. On the strategic side, the Tower transaction moved into execution with the first closing, while Syntys and our fintech platform continued to scale. With a strong balance sheet and disciplined capital allocation, we are well-placed for the rest of the year.
Moving to the strategic progress. Our digital infrastructure strategy is built on four pillars: connect, transport, host, and compute. We made tangible progress across all four. In connectivity, the Tower transaction reached first closing, which I will cover shortly. In transport, OFN signed a dark fiber agreement and a landing partnership in Iraq earlier this month, extending the reach of the Fibre in the Gulf, or FIG, project. In host, Syntys completed new capacity at Q Data and started construction of the additional capacity signed earlier. In AI compute, we announced our strategic investment in Zankore, our neocloud platform with Indosat, NVIDIA, and Nokia, which is now preparing for its operation phase next year. Together, these steps are building a broader infrastructure portfolio around our core connectivity business.
Let me now turn to the Tower transaction. Earlier this month, we completed the first closing with Zain, establishing a jointly owned regional TowerCo. The first closing brings together Al Abraj in Qatar and ITK in Kuwait, around 4,000 towers in total. Ooredoo and Zain each hold 50%, with both portfolios contributed in exchange for the TowerCo shares. Additional towers will be added over time, subject to regulatory approval and closing conditions. The platform is designed to bring greater scale and capital efficiency, with dedicated focus on passive infrastructure. As the closing took place after quarter end, there is no impact on our third-quarter results. Now turning to Syntys, our data center platform. We completed construction of 4.5 MW of additional capacity at Q Data, bringing active IT capacity to 34 MW across our data center portfolio.
At the same time, capacity under construction increased to 26 MW, supported by continued customer demand. Syntys generated QAR 177 million of revenue and QAR 80 million of EBITDA in the first nine months. Hyperscaler demand remains a key driver, accounting for the majority of revenue in Qatar. We continue to grow the platform in line with contracted demand as we progress towards our target of 120 MW. Moving to fintech. Our fintech platform continued to grow, led by Qatar and Oman. We now have over 400,000 monthly active users across all live markets. Year-to-date, net revenue grew by 17%. In Qatar, EBITDA grew by 20% year-on-year, and our share of the international remittance market remained at around 22%. We are now live in four markets, including Tunisia. Iraq is in the build-out phase, with a private beta planned for next year.
License application has also been submitted in Kuwait and Algeria. Turning to the group results for the nine-month period. Revenue grew by over 4% to QAR 19 billion , and EBITDA by over 6% to QAR 8.5 billion . EBITDA margin improved by almost 1 percentage point to around 45%. Net profit was QAR 2.9 billion , down 5%, mainly due to the one-off legal provision in Algeria recorded in Q2. Free cash flow increased by over 11% to QAR 5.7 billion . Looking at the third quarter on its own, revenue grew by around 4% to QAR 6.5 billion , and EBITDA rose by over 4% to QAR 2.9 billion . EBITDA margin was slightly higher at over 45%. Free cash flow rose by almost 20% to QAR 1.8 billion . Net profit was QAR 1.1 billion , down just under 5%.
Turning to revenue in more details. Seven market delivered revenue growth in the first nine month. Algeria, Tunisia, Qatar, and Iraq led the growth. Palestine, Oman, and the Maldives also contributed. Kuwait was the exception, as limited device availability weighed on handset revenues. On EBITDA, growth was ahead of revenue in most markets for the first nine months. Kuwait, Algeria, Tunisia, and Oman made strong contribution to the group. Margin improved to almost 45% on cost discipline and a lower share of device sales in Kuwait and Qatar. Excluding one-off items, our margin remained stable at around 44%. In Iraq, higher operating and energy costs weighed on margin, while 5G spectrum fee had an impact in Algeria.
Turning to net profit, the decline mainly reflected the legal provision in Algeria booked in the second quarter. Excluding this and other one-off items, normalized net profit was 2.7% lower at around QAR 3 billion , mainly reflecting higher depreciation and amortization alongside other non-operating items. On the third quarter, net profit was down just 5%. Excluding one-off, normalized net profit was 13% lower at around QAR 1 billion , primarily due to higher depreciation and amortization and other below EBITDA items. We invested QAR 2.8 billion in the first nine months, slightly lower year-on-year, with CapEx intensity below 15%. Investment mainly focused on new sites deployment and 5G expansion in Algeria, IT and digital capabilities in Qatar, fixed broadband in Tunisia, and 4G deployment in Palestine.
CapEx in Iraq and Kuwait was lower mainly to timing effect, and supply chain constraints delayed part of our network rollout. Free cash flows increased over 11%. In normalized terms, it was up around 8%. The increase mainly came from higher EBITDA and lower CapEx. This gives us good flexibility to fund growth while keeping the balance sheet strong. Our customer base grew by over 4% to above 55 million. Algeria, Iraq, Qatar were the main contributors with strong acquisition and better retention. Kuwait was affected by limited handset availability, and Oman by a customer base cleanup and competition. The decline in IOH mainly related to new KYC requirements in Indonesia. Including IOH, total customers stood at well over 146 million.
Our balance sheet remains strong. Net debt to EBITDA stood at 0.5x , well below the board target range. We have strong liquidity comprising cash and undrawn committed facilities. The vast majority of our debt is fixed rate with a long maturity profile. We continue to hold investment-grade ratings from S&P and Moody's. Finally, our guidance. Based on year-to-date performance, we are fully maintaining the full-year guidance. Despite recent geopolitical and macroeconomic developments, revenue growth is within the guided range, EBITDA margin is above our target, and CapEx is on track to stay within guidance.
With that, I will hand over to Abdulla, and thank you.
Thank you, Aziz. Good afternoon, everyone. I will take you through the operational performance, our market for the nine months in local currency terms. Starting with our home market, Qatar. Qatar delivered a solid performance with a growth in revenue, EBITDA, and customers. Revenue grew by 2%, driven by high service revenue, partially offset by lower handset sale. EBITDA increased by 1%, and margin remained strong at 52%. Customer base grew by 3% to nearly 3 million, with a growth in both prepaid and postpaid. Moving to Kuwait. Profitability improved while devices availability continued to impact top line. Revenue declined by 4%, mainly on lower handset and mobile revenue. Fixed and wholesale segment deliver strong growth. EBITDA increased by 12%, or around 6%, excluding last year bad debt provision. Margin improved by 5 percentage points to 37%.
Customer base declined by 4% to 2.8 million, as a limited devices supply affected gross additions. Now on Oman. Oman returned to top-line growth and continued to improve margin. Revenue grew by 1% as a fixed and equipment growth more than offset competitive pressure in mobile. EBITDA increased by 7%, and margin improved by 3 percentage points to 47%, supported by cost discipline and last year restructuring. Customer base stood at 3 million, slightly lower after a cleanup of mobile base. Fixed customer continued to grow. Turning to Iraq. Asiacell kept its revenue and customer momentum despite a tough economy backdrop. Revenue grew by 3%, driven by customer growth, higher data usage, and the new handset business. EBITDA was broadly stable. Margin was at 45%, declined by 1 percentage point on higher operational and energy cost. Customer base grew by 2% to 20 million.
Moving to Algeria. Algeria continued to deliver a double-digit growth in revenue. Revenue grew by 13%, supported by enhanced customer experience, ongoing investment, and a continued focus on profitability growth. EBITDA increased by 7%. Margin moderated to 43%, mainly because of 5G spectrum fees. Customer base expanded by 12% to 17 million, supported by market expansion and effective commercial campaigns. Next, Tunisia. Growth was again led by fixed broadband. Revenue grew by 7%. Fixed revenue was very strong on continued demand for fiber and fixed wireless access. Mobile also grew slightly. EBITDA increased by 8%, and margin improved to 43%. Customer base grew by 1% to 7.5 million, led by fixed broadband.
Turning to Maldives. Performance was healthy despite continued weakness to tourism-related activity. Revenue grew by 2%, and EBITDA increased by 2% on the back of resilient mobile and strong fixed revenue. Margin improved slightly to 56%, helped by cost optimization. Customer base grew by 5%, led by mobile and fixed segment. Next, Palestine. Ooredoo Palestine delivered strong growth in a still challenging environment. Revenue grew by 15% on improved business performance and favorable currency effect. EBITDA increased by 25%, and margin improved by 3 percentage points to 42%. Customer base remained at 1.5 million with a modest decline.
Finally, IOH, our equity accounting joint venture. Revenue grew by 11%, and EBITDA by 9%. Margin was 46%, slightly lower due to new frequency fees and revenue mix. Net profit increased by 33%. Customer base declined by 3%, mainly due to new regulatory requirements. This concludes my operational review.
Now back to Ali. Thank you.
Thank you very much, Aziz and Abdulla. We will now move to the Q&A session. If you would like to participate, please raise your virtual hand, and I will unmute your line when it is your turn. You can also type your question in the Q&A box. If you have joined by phone, just press star and nine. For the Q&A, I have Aziz and Abdulla, as well as Fadi and Thomas from our senior leadership team. Let me open the floor now with the first question coming from Thando from UBS. Thando, please go ahead.
Great. Good morning, everyone, and congratulations on the results, given the circumstances. I will start with maybe three questions. I do not think they are too difficult. The first one is just in terms of the Tower deal. Can we expect an equalization payment from Zain Group in the coming quarter, given Qatar and Kuwait are now complete? Are you still expecting $500 million to be received, around $500 million to be received at the end of this transaction?
The second question is just on Qatar. Apologies if I missed this at the start, but that 8% growth in Q3 seems pretty high and good at the same time. I understand there was a Samsung distribution deal as well. I wonder if we could just square that up in terms of how much of an impact did this have, and then what was the underlying or existing revenue growth within Qatar?
The third question is just again on Qatar, Kuwait, as well as Iraq. I am just wondering if you can give us what you guys are seeing in terms of that supply chain disruption. If you could just square it up in terms of are you seeing any improvements, and what steps are you taking to improve that equipment sales? Thank you.
I will take a couple. I will pass the one to the team. Starting with the Tower transaction. First, we are very happy, finally, first close. I think some of you might have lost hope after a while, but we persevered, we managed. What we have secured today is a close of our Qatar for Zain's Kuwait. This is the first close. Regarding an equalization payment, with the agreement, we are not having an equalization payment within the first year. The amount is withheld and will be paid within the second year. You cannot expect any equalization payment this quarter or next quarter.
What you will see is an accounting gain on the value of the asset held for sale versus the contribution of the assets, the country's contribution we receive for the value of our assets. This will be reflected in Q4. It is quite a significant gain. I am preempting the question. We will not disclose the number today of the actual gain because we are still finalizing calculation, getting it reviewed by the auditor. So I do not want any quotes, "Oh, you quoted this." It is not exactly that. Once we have the final number, we will happily disclose it.
Final question on the towers, which is the total equalization payment. We still anticipate a quantum of north of $500 million if and when all the markets are closed. Second part I will answer, which is logistical disruptions. Look, the region has adapted quite well. There is quite a few alternate routes in terms of logistics, mostly are on land from Oman. Instead of being fed by ship, they are fed on land via Oman and then to Qatar and the rest of the region. The alternate routes for Iraq coming from Turkey and Jordan.
Most of the disruptions we were facing in terms, for instance, device sales in Kuwait and Qatar, these are resolved. We just had a very successful launch of the new iPhone in Qatar and Kuwait and in all the markets. We are low in inventory, not because of logistical issues from the region, just due to iPhone, Apple's logistical issues and shortages on full. So I think they are mostly resolved. We are trying to catch up some a bit of the backlog in terms of CapEx in Iraq, for instance, in terms of network rollout in Q4.
The last question, I will leave it to you guys, was relating to Qatar and the growth, which we are very happy for.
Yes. This quarter also shows a strong growth momentum for Qatar, and this is driven by the mobile growth plus the ICT, which is, we say it's a low-margin business, and the transit and the wholesale. This is mainly the growth is driven by this revenue stream.
All right. Thank you for the answers, and thank you for the question, Thando. The next question from Abhishek. Could you clarify the expected impact of the Tower transaction on consolidated EBITDA from 2027 onwards? And also, how much of the transaction proceeds should we expect to receive? Which you covered actually. And will this primarily be used for debt reduction or reinvestment?
I'll answer a very small part. Debt reduction, I don't think we have much debt to reduce. We're at 0.5x net debt to EBITDA, so I'm not sure this would be a smart use of proceeds. Regarding the accountant treatment, Fadi, Abdulla, I'll let you take it.
On EBITDA, we expect minimal impact on EBITDA this quarter. The actual amount will be disclosed in Q4 itself for this transaction or disclosing.
On EBITDA, the Tower transaction has a positive impact.
All right. Thank you. The next question again from Abhishek. "Could you please provide some color on the key factors driving the 1.4% decline in mobile revenue in Kuwait?
In Kuwait, I think it is mostly related to the handsets supply chain. Many of the acquisitions come associated or bundled with the handset. So in line with the decline with the handsets, we have seen the decline in activations. We are happy to see in Kuwait the EBITDA enhancement. We have seen 11% EBITDA enhancement in absolute amount, even the EBITDA margin reaching to 38.9% for the quarter and 37% year to date, mainly driven by the fixed revenue increase and the wholesale increase as well.
I will just add one point to Kuwait. What you can see is also a slight reduction in our subscriber number. As you know, Kuwait has been quite severely impacted during this conflict. Actually, I think physically it has been one of the countries, at least in our footprint, the most impacted. As also you know, we have a predominance of our customer base which sits within the expat community. We have witnessed a slight drop in expat population in Kuwait, which is reflecting through our numbers.
Thank you. Moving to the next question. Yes, from Nikhil, CBQ. "What has been the reason behind the higher charges on your commission on cards, i.e., against a normal run rate of QAR 180 million, QAR 190 million per quarter? Q3 has seen an increase to QAR 290 million.
Is this a question for CBQ or for Ooredoo?
Question from CBQ, but I think it's not clear. Do you want to ask the question live, Nikhil?
Maybe raise his hand because[crosstalk].
[audio distortion] I do not understand. Commissions?
Yes, please, Nikhil.
I do not want to close these things.
Do you hear us, Nikhil?
Well, actually, thank you for taking the call. I just wanted to understand in terms of your overall, you can say, commission on cards, which is shown under the expenses column.
I am not quite sure which commission on cards you are talking about.
I need to understand, is that the normal run rate that we could be seeing it going forward, or has that been some one-time cost associated?
Nikhil, we are not sure what you are talking about and where you are getting this number from. What are you referring to as commission on cards? Which business segment are you talking?
I am talking about the group level, sir. Okay, fine. I think so maybe I will just again put it across back to your IR later on in the call.
Yeah, just send it. Send a highlight where you are getting this number. And we will be very happy to answer that question if we can.
Yeah. Thank you.
Thank you. The next question from an anonymous attendee. "In Kuwait, EBITDA margin rose 5.2 percentage points, while the customer base fell 4.3% and equipment revenue dropped 22%. How much of the margin gain is structural versus low-margin device sales, and what do you expect to happen in the margin and subscribers when device supply normalizes?
So, yes, a part of the margin gain is due to the reduction, but that was mainly in Q2 of this year, where we had shortage on device sales. What we are seeing is an improvement in the quality of the customers. As I mentioned earlier, we also saw a slight reduction in the expat population. This is usually the lower tier of the population and lower tier of our customers, so lower-margin customers.
Thank you. The next question.
One last thing. Kuwait, and this is a comment, Kuwait's management team has been extremely proactive in terms of cost control.
Thank you, Aziz. Next question, please. I currently do not see any further questions, but encouraging everyone. Well, I don't see further questions, Oh, yeah, Thando.
Great. I'll just ask one. Can you just talk us through the outlook you have for Iraq, please? I see the macros as weakened, I'd say, especially in Q4. I'm just trying to get a sense of how you're thinking about Iraq, because this has been a key growth driver for you. Then maybe a second question on Algeria. I know you're investing in terms of margins, and I know you're investing now in 5G and the spectrum there, but what's a more sustainable EBITDA margin that we should expect going into 2027, please? Thank you.
Iraq, even before the conflict, we expected slower growth, and this was part of our budget, than the previous year. This was driven mainly by two factors. One, the migration to 4G is close to completed, so we are mature in terms of a market for 4G. The second part is, as you know, especially two years ago, but a bit of last year as well, we benefited quite a lot, not just us and our competition, from the change of regulatory treatment to Korek, and the different step which had been taken by the regulator towards them, which created quite a significant inflow of new customers to us and to Zain.
We also, in our plan, sort of seen that trend maturing. What we are seeing today in Iraq, in terms of top-line growth, in terms of customer growth, we are actually where we thought we would be according to plan. That is not much surprise, and we believe it is a stabilized run rate. What we have been witnessing in Q3, and probably will stay at the same level in Q4, is some slight reduction in discretionary spending from subscribers. That is why profitability is a bit lower than expected. Last but not least, which is a systemic effect, is the devaluation in currency. What was the second part of the question?
Algeria. Sustainable EBITDA margin.
Algeria, look, we are growing very strongly. We are the number one network in terms of 5G quality. We are also the number one network. I think we have 60% of revenue market share of 5G. We are growing very fast, and our EBITDA margin are improving. I will let finance take.
We expanded extra frequency costs that we incurred as part of the 5G launch, which impacted Algeria EBITDA margin. Over time, with the revenue growth, hopefully we will see a slight enhancement on the EBITDA. Again, the 5G license cost was a major cost increase for Algeria.
Thank you. The next question is regarding Qatar. Are we seeing increasing competitive pressure on postpaid ARPU, particularly in higher-value customer segments, and how much of the weaker EBITDA margin deflects pricing versus higher operating expenses in Qatar?
We are not seeing pressure on the higher-end ARPU. We have this rule, 20% of our customers represent around 80% of our EBITDA in Qatar, and this we will defend the customer base and the ARPU associated with it through especially excellence in customer experience. The slight reduction in EBITDA margin is not coming from OpEx or from reduction in ARPU. It is coming from expanding B2B and ICT sales, which are quite strong, but they come with a slightly lower operating margin than core telco.
Just off of my head, do not quote me, but it is a rough rule of thumb. Our gross operating margins in terms of consumer is north of 70%. Our gross operating margin in terms of ICT is closer to 55%-60%. That has an impact.
Thank you. The next question is again from an anonymous investor. Will the positive gain have an impact on dividends? I think referring to the Tower deal that we mentioned, but we normalize the net profit for dividends.
We normalize. It will be an exceptional, quite sizable exceptional gain. At the same time, it's an accounting gain. It's a non-cash item, and that's, you know, my answer when it comes to dividends. Management recommends, it's at the discretion of the board, and that's a discussion to be had very early next year.
Thank you. The next question is about the CapEx guidance. CapEx as of the first nine months seems low compared to the guidance. Do you still expect to reach this, and which markets will it mostly be from?
Our CapEx overall, first there's some cyclicality to CapEx. Q4 is always a catch-up month in terms of CapEx, because a lot of the CapEx we do in Q4 is to set up the next year. Some CapEx item, especially coming from subsea cable, have been on hold. As you can expect, laying a cable through the Strait of Hormuz is impossible as of today. I think that represented close to $300 million, $250 million- $300 million, which has been on hold. We did accelerate some CapEx in Algeria to offset and to avoid next year being hit by subsea cable, plus some planned CapEx for Algeria.
We brought forward some of the rollout of next year to this year, at least in terms of orders. It absorbs the lumpiness, plus it allows us to secure our dominance in terms of 5G in that country. We try to be very nimble in terms of CapEx. Again, there were some logistical and delivery issues, especially in Q2 and a bit of Q3, especially in Q2 in Iraq due to the current situation. These are resolved. We'll try to catch up as much as we can.
Thank you. The next question is from Abhishek Sukhatme . Could you please provide some color on the key drivers behind the strong year-on-year growth in Tunisia's fixed broadband revenue?
Very strong execution and commercial strategy.
Strong demand on fixed wireless access, we can say.
Yeah.
The last question that I can see for now, are there any plans to increase your net debt and utilize the balance sheet further in the near term?
Look, we do view our current leverage ratio suboptimal. At the same time, we have no need for the current cash. Markets, as you've been followed in terms of cost of borrowing, have been more elevated than traditionally due to a number of circumstances, not limited, but also including the current regional effects. We've seen the 10-year treasury, which is close to its highest. It's resolved slightly, but it's still close to six. So, we've always been very opportunistic in terms of our debt issuances. If we don't have immediate need for debt, we don't see the purpose of incurring higher debt servicing cost and locking in higher rates. So, we'll remain opportunistic on that. But yes, we are looking to resolve our debt issue.
Thank you. Next question from an anonymous attendee again. "On Syntys, could you provide greater visibility on the 26 MW currently under construction in Qatar? What proportion is already contracted? What is the commissioning schedule, and what range of EBITDA returns or project IRRs are you targeting?
So, it is in construction. As you know, we have an approach to build to suit. So, we don't build and then try to lease out facilities. We only build when we have anchor tenants. This facility has a significant anchor tenant, which is utilizing most of the capacity. We're currently finalizing an expansion of that contract to utilize the full capacity. So, very shortly, it should be fully leased out. In terms of EBITDA returns, typical, I won't talk about this facility in general, but what we see is when a facility is fully RFS and fully utilize a full run rate, we're running EBITDA margin north of 60% on these types of facilities. Off of my head, IRRs are in the mid-levels unlevered.
Thank you. Next question, again, anonymous. "How should we think about dividends given the policy of 50%-70%? Can we expect the higher end? With so much cash, would you revise the policy up again?
Again, we just revised the policy. Last year, we were in the mid-range of that policy at 60% payout ratio. I do not envisage revising the policy. Then where we will land within that guidance, my usual answer, this is a purview of the board.[crosstalk].
All right. The next question. I do not see further questions, but I will give-- Nikhil, we will take this question offline if it is okay for you, regarding your questions on commissions. I will get back to you on that today.
I was reading the question. This is not commission on cards. This is interconnect rates. Let us see the full question right now.
Okay. I have an answer from Nikhil. We will take it offline. Further questions? I do not see any. I will check once again. Okay. Since there are no further questions, I would like to thank everyone for joining us today. Our next release will be our full-year results expected in February. If you have any follow-up questions, please feel free to contact us, the IR team. Any closing remarks, Aziz or Abdulla?
No, thank you as usual. Thanks for your support. Thank you for the good questions. Looking forward to talk to you next quarter. There is no equity roadshow too?
We are planning.
Okay.
Thank you. Thank you very much.