Wataniya Telecom posts KD 62.9m profit in first nine months of 2012 EBITDA slips 1.5% y/y to KD 231.3 mln

KUWAIT CITY, Nov 28: Wataniya Telecom at their Extraordinary General Meeting (EGM) Wednesday announced a KD 62.9 Million net profit for the first nine months of 2012 was made with continued growth in the company’s customer base and revenue. The EGM after announcing the financial results for the business period under consideration, also saw the chairman explain to the shareholders some amendments made to Articles 16, 17 and 19 of the shareholders constitution, dealing mainly with Board membership and the pre-requisites thereof. Reading the three amendments of the shareholders’ Articles of the constitution to the packed audience of shareholders, company executives and the media, the Qatari Board Chairman of the company, Sheikh Abdullah Bin Mohammed Al-Thani stated that in the first amendment, the company shall be managed by a seven-member Board of Directors with two of them appointed by the Minister of Finance of Kuwait and the remainder elected by the General Assembly of Shareholders by secret ballot for a three-year period, after which members may seek re-election.

On the second amendment (Article 17), Sheikh Al-Thani stated that for one to be qualified to be a Board member, the person should be the owner of at least 10,000 shares of the company or be represented by a legal entity. If at the time of his/her consideration for he/she doesn’t own the needed number of shares, he’d be given a one month grace period to sort things out else the membership will be nullified. The share must be deposited in the bank within one month from the day of election and cannot be traded until the membership tenure expires. The 10,000 share requirement for Board membership, as the Chairman pointed out, “Is to ensure members’ full-hearted participation and management”. Exempt from the 10,000 share requirement, however, are Kuwaiti government appointees.  

In the third amendment (Article 19), if there is a vacancy in the position of an elected Board member, the replacement shall be a member who has won the majority of shareholders’ votes, from amongst candidates who failed in their bid for membership of the Board in the previous election. If the vacancies total up to a quarter of the main positions or there was no one with the relevant qualification for the vacant position, the Board has to invite all the shareholders to a General meeting within a period of two months from the date of the last vacancy, to elect new members. In all cases the new Member will only complete the remaining period of his predecessor’s tenure.

With a total customer base increasing to 18.8 million at the close of the third quarter in 2012 as against 17.4 million at the same period in 2011, representing a growth of 8.5%, revenues for first nine months of 2012 amounted to KD 559.1 million (USD 2.0 billion), compared with KD 540.2 million (USD 1.9 billion) for the same period in 2011, amounting to growth of 3.5%.
The Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first nine months of 2012 was KD 231.3 million (USD 822.8 million), compared to EBITDA of KD 234.8 million (USD 835.6 million) for the same period in 2011, a decrease of1.5%.
While the consolidated Net Profit stood at KD 62.9 million (USD 223.9 million), compared to Net Profit for the same period in 2011 of KD 345.0 million (USD 1.2billion), Net Profit for the third quarter of 2011 included a fair value gain of KD 265.5 million (USD 944.7 million) recorded due to revaluation of existing held interest in Tunisia following the increase in the shareholding from 50% to 75%.

The net profits for the first nine months of 2012 were adversely impacted by competitive pressure in Kuwait and foreign exchange movements in Algeria and impairment for an operation in Q3 2012.
The consolidated earnings per share in the first nine months was 126 fils (45 Cents), compared to 688 fils (USD 2.4) per share earned for the same period last year. Excluding revaluation gain the earnings per share in the first nine months of 2011 was 159 fils (57cents), a decrease in 9M-2012 by 20.9% compared with 9M- 2011.
Sounding a positive note, the Chairman said   Wataniya Telecom in 2012 has seen revenue growth of 3.5% while EBITDA has remained stable at KD 231 million, adding that “Foreign exchange movements in some of our key operations have impacted profitability, while our domestic market continues to face competitive challenges”.
He pointed out that positive performances from the company’s operations in Algeria and Palestine further demonstrated the growth potential seen across the Group and the successful strategies being implemented.  We are delighted with the launch of 3G services in Tunisia and look forward to the future roll-out of fixed services as both form part of our strategy which focuses on data”, he concluded.


By: Iddris Seidu

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