PalTel's profit hit by currency fluctuations
Palestine operator sees 12% decline in nine-month period to September 2012
PalTel, the incumbent telecom operator in Palestine, posted a net profit of $89.4 million in the nine months to September 31, a decline of 12% compared to the same period in 2011.
The telco, which offers mobile and fixed-line services in the West Bank and Gaza, posted consolidated net revenues of $388.5 million for the nine months ended September 31, a slight decline compared with the $395.5 million revenue it posted at the end of Q3 2011.
The company continued to show growth in the operating revenues of its data services by 31.8%, while mobile, fixed-line and media revenues dropped by 1.9%, 6.9% and 8.7% respectively.
PalTel attributed the decline in revenues and income to "a general short term regression" in economic growth in the Palestine due to political stalemate, reduced donor funding and a fiscal crisis in the public sector. "Such pressures have manifested themselves in higher tax brackets on business and removal of tax incentives and other exemptions," the telco said.
Other operating pressures also included the devaluation of the Israeli Shekel, which is PalTel's collection currency, versus the Jordanian Dinar, which it uses to report its results.
Sabih Masri, chairman of PalTel, said that the company remained optimistic and took a long term view. "We have taken a long term outlook on things, given the short term economic downturn in the country, however we are maintaining stability in our performance, upgrading our networks, maintaining growth in our customer base, and as such we remain optimistic about the future," he said.
Ammar Aker, CEO, Paltel Group, added: "If we remove the exogenous factors, our internal operating indicators remain positive. It is natural that we will be affected by the economic downturn in the national economy as a result of fiscal and macro-economic pressures with growth retracting from 9% to less than 6% in all economic output in the country.
"We have continued investing in network expansion and upgrade to our mobile operations to meet new customer demand. We have also connected with international marine cables to provide speedier and safer internet connectivity for our data customers. In a nutshell we are preparing for the future, one we see coming with growth opportunities; expanding into new areas including Area C to introduce new service lines."
PalTel, which competes with Wataniya Palestine in the West Bank, had 391,000 fixed-line subscribers and 2.59 million mobile subscribers by September 31.