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Sun 24 Feb 2008 11:56 AM

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Qtel sees earnings drop 9.6% due to Wataniya buy

Qatari telecom says Q4 net profit fell to $100mn due to amortisation impact.

Qatar Telecommunications Company (Qtel) said on Saturday its fourth quarter net profit fell 9.6% due to a one-off amortisation impact associated with its March purchase of Kuwait's Wataniya.

Net income in the three months to December 31 fell to 366 million riyals ($100.6 million) from 405 million riyals in the year-earlier period, the state-controlled telecom operator said.

Four analysts surveyed by newswire Reuters in December estimated net profits of between 310 million riyals and 630.5 million riyals, with the average at 432.27 million riyals.

Qtel said that if the amortisation impact was evenly distributed over one year, rather than all factored into the fourth quarter, profit would have risen 18.3% to 479 million riyals.

The firm also plans to sell stock to existing shareholders to raise about 5.86 billion riyals, to pay back debt and finance growth including possible acquisitions, said a company official, who asked to remain anonymous in line with company policy.

"There was a lot of growth in Qatar," he said.

The number of mobile phone users in Qatar rose 31% to 1.5 million and average revenue per user was higher as the economy grew and the population expanded, the company official said. He declined to give an outlook for 2008.

Qatar is the world's largest exporter of liquefied natural gas (LNG) and an oil producer, benefiting from oil prices that have risen five-fold in the last six years.

Qtel's fourth-quarter revenue more than doubled to 3.47 billion riyals, compared with 1.34 billion riyals in the year-ago period. That was before it bought National Mobile Telecommunications Company (Wataniya), Kuwait's second mobile operator.

Qatar and Kuwait were its biggest sources of revenue, followed by Algeria, a Qtel statement said.

The company will offer a 2007 dividend of 4 riyals per share, compared with 10 riyals in 2006, and one free share for every 10 held, it said.

"We have made a calculated decision to re-invest some of our profits back into the business in order to fuel continued growth," it said.

The company's shares have risen more than 21% this year. (Reuters)

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