Telecom operator reported near-flat 2015 profit as improved earnings from Gulf ops offset performance in Iraq and Tunisia
Qatar's Ooredoo expects its core earnings to fall by up to 3 percent this year, warning that foreign exchange volatility would continue to hurt.
Ooredoo reported near-flat 2015 profit on Tuesday as improved earnings from its Gulf operations offset worsening performance in Iraq and Tunisia and currency weakness in emerging markets.
The former monopoly, which operates in a dozen territories in the Middle East, Africa and Asia, reported earnings before interest tax, depreciation and amortization (EBITDA) of 13 billion riyals ($3.57 billion) in 2015, up 1 percent on 2014.
EBITDA was expected to fall 0-3 percent in 2016, Chief Financial Officer Ajay Bahri told an analyst call that was posted on its website on Thursday.
He also predicted 2016 annual revenue would be between 1 percent below and 2 percent above 2015's 32.2 billion riyals. He did not give a profit forecast.
"We expect currency movements to continue to impact results in 2016 as the dollar appreciates against emerging market currencies," Bahri said.
"Our guidance is based on organic growth in key markets, a more rational competitive environment and no further deterioration in the economy and security situation in Iraq."
Iraqi subsidiary Asiacell's 2015 profit plunged to 159 million riyals from 1.03 billion riyals in 2014, which Ooredoo blamed on network shutdowns - arising from Islamic State's control of parts of the country - plus higher depreciation and amortisation costs after buying 3G mobile frequencies.
Ooredoo's shares have fallen 4.5 percent since Tuesday's earnings statement, which also proposed cutting its annual dividend by a quarter, a decision Bahri said was justified despite the near-flat annual profit and lower capital expenditure requirements in 2016.
"We looked at the investment profile going forward as well as the uncertainty in the economic environment," he said.
"We have refinancing of almost $2 billion due over the next 15 months."
Ooredoo's 2016 capital expenditure will likely be 6.5 billion to 7.5 billion riyals in 2016, Bahri said. This compares with its spending forecast of up to 9.5 billion riyals for 2015.