Qtel blames competition, forex for profit decline

Qatari telecoms incumbent Qtel has blamed heightened competition and currency movements for a sharp fall in profit during the first half of 2012.

At 1.35 billion riyals ($371 million), net income was 11.8% down on the figure reported for the first half of 2011, despite a 6.1% increase in revenues to 16.4 billion riyals.

Qtel says the bottom line was hit by adverse foreign exchange movement in Indonesia and Algeria. Excluding the impact of currency fluctuations, operational results showed profit growth of 9%, it claims.

Qatari telecoms incumbent Qtel has blamed heightened competition and currency movements for a sharp fall in profit during the first half of 2012.

At 1.35 billion riyals ($371 million), net income was 11.8% down on the figure reported for the first half of 2011, despite a 6.1% increase in revenues to 16.4 billion riyals.

Qtel says the bottom line was hit by adverse foreign exchange movement in Indonesia and Algeria. Excluding the impact of currency fluctuations, operational results showed profit growth of 9%, it claims.

The operator also suffered from a surge of competition in Kuwait, where it operates under the Wataniya brand.

While revenues for the entire Wataniya business, which also includes Qtel’s operations in Tunisia, Algeria, Saudi Arabia, the Maldives and Palestine, rose to 4.8 billion riyals during the first half of 2012 from 4.6 billion riyals a year earlier, earnings before interest, tax, depreciation and amortisation were unchanged at 2 billion riyals.

One problem in Kuwait, says Qtel, has been a fall in revenues from text messaging as customers turn to cheaper, internet-enabled messaging applications on mobile phones.

By contrast, Qtel continues to perform well in its domestic market, despite tough competition, growing revenues by 7.2% to 3.1 billion riyals between the first half of 2011 and the first half of 2012 and signing up another 5 million customers to end the quarter with 2.43 million in total.

It has also shone in Iraq, where it operates under the Asiacell brand. Revenues for the business soared by 17.5% to 3.3 billion riyals. Not surprisingly, given the growth prospects in the country, Qtel has announced its intention to raise its shareholding in Asiacell to 60%, subject to regulatory approval, having already increased its stake from 30% to 53.9% during the first half.