Omantel's Q3 profit climb hit by Pakistan losses
Analysts’ estimates missed but YTD growth still seen after broadband surge
Oman Telecommunications (Omantel) yesterday announced a modest increase in third-quarter net profit that fell short of analysts' forecasts, Reuters reported.
The shortfall is largely attributed to escalating costs and underperformance from the telco's Pakistani operator WorldCall, which sustained losses that nullified mobile broadband gains and lower asset depreciation.
Net Q3 profit reported yesterday was OR28m ($2.6m), a year-on-year increase from OR27.43m in Q3 2011, according to Reuters calculations. Analysts polled by the news agency made an average prediction that Omantel would achieve a figure of OR29.88m.
Quarterly revenue stood at OR108.5m, compared with OR109.9m a year ago, while nine-month net profit rose 9.2% to OR90m, Omantel announced, with revenue increasing 2.9% over the same period to OR342.9m.
Omantel attributed the revenue growth to a 67% surge in mobile broadband business. The company said broadband successes also drove a rise in wholesale revenue, which was up 8.5% year-on-year.
Omantel's mobile virtual network operators (MVNOs) Friendi and Renna lease surplus capacity at wholesale rates and also often pay a cut of revenues. Omantel can also count their subscribers as its own, which has helped the former domestic-monopoly operator in its struggle against emergent competition from Qatar Telcom (QTel), in the form of Oman-based subsidiary Nawras.
Omantel estimated its group subscriber base as 3.77 million as of September 30, up 9.8% from a year ago, which includes subscribers from Pakistani operator WorldCall, which it also owns.
"Loss incurred by Worldcall has slightly impacted group profitability growth," Omantel said.
Omantel also said nine-month operating expenses rose 1.3% year-on-year to OR247.2m as the result of a larger wage bill and increased marketing costs and interconnection fees.