Kuwait’s Wataniya Q2 profit halves, hit by Algeria currency loss
Wataniya, Kuwait’s No. 2 telecoms operator, reported a 49 percent drop in second-quarter profit on Monday, hit by foreign exchange losses from its Algeria unit and increased domestic competition.
Net profit at the firm, a subsidiary of Qatar Telecom (Qtel) , was 19.1 million dinars ($67.83 million) in the three months to June 30, down from 37.3 million dinars in the same period last year, a company statement said.
The company had 18.3 million customers as of June 30, up 8.3 percent from a year ago.
Wataniya, which also has operations Tunisia, the Maldives, Saudi Arabia and the Palestinian Territories as well as Algeria, said its currency losses were 37.75 million dinars, compared with a gain of 7.9 million dinars in the same period of 2011.
“Net profit has been adversely impacted, primarily due to changes to the operating environment in our domestic market and also foreign exchange movement in Algeria,” Sheikh Abdullah bin Mohammed al-Thani, Wataniya chairman, said in the statement.
“A combination of intense competition, increased regulatory fees and the broader economic environment have placed significant pressure on the quarterly performance in Kuwait.”
The head of Kuwait’s biggest bank last week blasted the country’s political deadlock, underscoring business leaders’ frustration with an impasse that has delayed much-needed economic development.
Wataniya’s second-quarter net profit in Kuwait, where it competes with Zain and Saudi Telecom Co affiliate Viva, fell 36 percent to 13.6 million dinars, while Algeria swung to a net loss of 1.1 million dinars despite revenue rising 21 percent year-on-year.
Group second-quarter revenue was 187.8 million dinars, up from 182.3 million a year ago. Kuwait, Algeria and Tunisia accounted for 93 percent of revenue in the period.
Tunisia unit Tunisiana launched 3G services on Monday, covering 48 percent of the North African country’s population, according to a Qtel group statement. It aims to increase this coverage to 71 percent of the population by the end of the year.
In June, Qtel said it had offered to buy the 47.5 percent of Wataniya it does not already own as it seeks to build its presence across the Gulf region.