Qatar Telecom QSC, the nation’s biggest phone company, said second-quarter profit dropped 11 percent because of “adverse foreign exchange movement in Indonesia and Algeria.”
Net income fell to 641 million riyals ($176 million) from 722 million riyals a year earlier, the Doha-based company said in an e-mailed statement today. EFG-Hermes Holding SAE estimated a profit of 713 million riyals, according to data compiled by Bloomberg. Revenue rose 4.6 percent to 8.36 billion riyals in the quarter.
Qatar Telecom, which owns stakes in phone companies from Tunisia to Indonesia, is seeking to expand outside its home market, where it faces competition from Vodafone Qatar. The Doha-based company reached agreements in May to double its holding in Asiacell, a mobile operator in Iraq, for $1.47 billion. It teamed up with Princesse Holding of Tunisia in 2010 to buy Orascom Telecom Holding SAE’s 50 percent stake in Telecom Tunisie for $1.2 billion.
Operations in Kuwait were “negatively impacted by stronger competition” in the quarter, Qtel said in the statement. The company is now offering to purchase shares it doesn’t own in Kuwait’s National Mobile Telecommunications Co., also known as Wataniya Telecom. It submitted an offer document for approval from the Kuwait Capital Markets Authority, which may lead to an offer for all the issued shares of Wataniya, it said.
Qtel offered to pay about 640 million dinars ($2.3 billion), or 2.67 dinars a share, to purchase the stake, Al-Rai newspaper reported July 1, citing unidentified people familiar with the matter. Wataniya competes with Mobile Telecommunications Co., Kuwait’s largest mobile phone operator, known as Zain.
At the end of the second quarter, the group’s customers stood at 83.7 million, an 8 percent increase from a year ago. Qatar, Tunisia, Iraq and Algeria maintained positive momentum from the previous quarter, it said. Qtel’s operations in Indonesia grew, while its Omani unit Nawras returned to positive customer growth and stable revenue.
The shares lost 0.1 percent to close at 104.9 riyals in Doha yesterday. The stock has gained 11 percent this year compared with 5.7 percent decline in the benchmark QE Index.