Kuwait telco Wataniya Q4 profit falls 26.5%

Gulf state's number two telco made a net profit of US$44.78m for three months

Wataniya, Kuwait's number two telecom operator, reported a 26.5 percent fall in fourth-quarter net profit as more customers failed to offset tougher competition at home and foreign exchange losses in Tunisia and Algeria.

The firm, a subsidiary of Qatar Telecom (Qtel), made a net profit of KWD12.6m (US$44.78m) in the three months to December 31, down from KWD17.1m in the year-earlier period, it said in a statement.

EFG Hermes forecast quarterly profit of KWD18m.

"Foreign exchange impacts again impacted profitability and competitive dynamics in Kuwait remain challenging," chairman Sheikh Abdullah Bin Mohammed Bin Saud Al Thani said.

Wataniya's annual profit fell to KWD75.5m, down from KWD362.1m a year earlier.

The firm's 2011 profit was boosted by a fair value gain of KWD265.3m after it upped its stake in Tunisiana to 75 percent from 50 percent. Without this fair value gain, its 2011 net profit would have been KWD96.8m.

Wataniya wants to more than double its annual dividend despite the profit slump, proposing a cash pay-out of 125 fils per share for 2012. For the financial years 2007 to 2011, it paid dividends of 50 fils per share, Reuters data showed. There are 1,000 fils in a dinar.

In Kuwait, Wataniya competes with number one operator Zain and Viva, an affiliate of Saudi Telecom Co, while it also has operations in Algeria, Tunisia, the Maldives, Saudi Arabia and the Palestinian Territories.

"It's hard to see any revenue growth in Kuwait because Zain and Viva are ramping up competition," said Umar Faruqui, a telecom analyst at Global Investment House in Kuwait.

The company's full-year domestic revenue slumped by nearly a tenth despite it recruiting more local customers.

Its total consolidated customer base was 19.2m at the end of December, up 7.8 percent from a year earlier. Algeria and Tunisia accounted for 16.25m customers combined.

Full-year net profit for 2012 attributable to Wataniya from Tunisiana fell to KWD35.2m from KWD39.6m in 2011. The 11.1 percent drop was in line with a decrease in the Tunisian dinar against the dollar last year, Wataniya said.

Kuwait's currency is pegged to a basket of currencies, of which the dollar is thought to be the largest component.

Wataniya's full-year profit from Algerian unit Nedjma nearly doubled to KWD19.6m.

Quarterly revenue was KWD183.4m, Reuters' calculations showed, against KWD186.5m a year ago.

Wataniya shares ended 1.7 percent higher on Kuwait's bourse, outperforming the wider market index, up 0.1 percent.

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