LONDON: Qatar’s biggest phone company reported a sharp decline in profits as sales fell at home and it was hit by tough trading conditions in Indonesia and Algeria.
Ooredoo second quarter net profit fell 60 percent to 203 million Qatari riyals ($54.7 million), the Doha-based company said in a stock exchange filing.
It said it was hurt by lower revenues in Indonesia and Algeria as well as substantial foreign exchange losses in Myanmar. It sent the stock tumbling 3.7 percent and dragged the overall index lower.
“Our financial results come at a time when the telecom sector is undergoing significant structural changes combined with unfavorable foreign exchange rates as well as challenging market conditions,” said Ooredoo Chairman Sheikh Abdulla Bin Mohammed Bin Saud Al-Thani.
Gulf phone companies have been hurt by a regional economic slowdown, reducing fixed line revenues and competition from web based voice services.
Regional players including Qatar’s Ooredoo and the UAE’s Etisalat have expanded their operations into Asia and Africa in recent years which has made them susceptible to foreign exchange volatility because both UAE dirham and Qatari riyal are pegged to the US dollar.
Ooredoo said that revenues in its home market of Qatar edged lower in the first half of the year to 3.9 billion riyals compared to 4 billion riyals a year earlier.
Lower voice and roaming revenues were partially offset by stronger performance in ICT sales.
It also rolled out a 5G broadband network in the first. half of the year.
About 45 percent of Ooredoo revenues now come from its digital and data businesses. The company generated sales of about 33 billion riyals last year.
The phone company again teamed up with footballer Leo Messito promote its internet business in the first half of the year.
But it needed more than Messi magic to compensate for tough trading conditions in many of the markets it operates in.
Still, the phone company said that it achieved a strong performance in Iraq, Tunisia and Oman.
Last week regional rival Etisalat reported a 12.3 percent rise in second-quarter net profit as it cut spending and added more subscribers.
Etisalat, which operates in 16 countries, said that its subscriber base grew 4 percent year-on-year to 144 million over the period but were flat compared to the first quarter of the year.
