Ooredoo A+ rating affirmed

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Fitch Ratings today affirmed Qatar’s leading telecom company Ooredoo’s long-term issuer default rating (IDR) at A+ with a stable outlook.

The rating affirmation reflects the continued strength of Ooredoo’s links with the State of Qatar (AA/Stable). Ooredoo’s ratings are two notches lower than the Qatar’s, in accordance with Fitch’s parent and subsidiary rating linkage methodology. Qatar directly and indirectly owns 69 per cent of Ooredoo.

“Ooredoo’s revenue fell 2 per cent and 3 per cent in 2014 and 2015 respectively, as the company came under pressure from both foreign exchange fluctuations and weaker economic conditions in some key markets,” Fitch said. “The on-going political tension in Iraq has caused significant revenue declines in 2014 and 2015. In 2016, we expect continued foreign weakness to hold back Ooredoo’s financial results reported in Qatar riyals, even though international growth in local currency terms may continue.”

Fitch said Ooredoo generated approximately 25 per cent of its consolidated revenue in 2015 from Qatar, and 31 per cent of EBITDA. Its EBITDA margin in Qatar improved in 2015 but may weaken in 2016 due to a softer economic environment, and as competitive pressure continues unabated, Fitch said.