Qtel Second-Quarter Net Rises 59% on New Customers

By Haris Anwar and Arif Sharif

Sept. 14 (Bloomberg) -- Qatar Telecom QSC, which provides phone services in 16 countries, said second-quarter profit surged 59 percent as it added customers in Iraq, Oman and Algeria, while performance in its home market was ``solid.''

Net income increased to 654.5 million riyals ($180 million), or 5.95 riyals a share, from 412.1 million riyals, or 3.75 riyals, in the year-earlier period, the company said today in an e-mailed statement. ING Bank NV analysts estimated profit would rise 28 percent in the quarter to 529 million riyals. Revenue surged 78 percent to 4.56 billion riyals.

Phone companies in the Persian Gulf are expanding abroad to boost sales as domestic markets mature and competition grows. Qtel bought 41 percent of PT Indosat, Indonesia's second-biggest mobile phone operator, in June for $1.8 billion.

``The addition of Indosat to the group means that Qtel now has an international consolidated customer base of over 51 million,'' Mohammed Bin Saud Al-Thani, chairman of Qtel, said. ``From the third-quarter onward, Indosat's share of contribution to the group's revenue will be significant.''

Acquisitions

Last year, Qtel agreed to pay $3.72 billion for a 51 percent stake in Kuwait's National Mobile Telecommunications Co. KSC, or Wataniya Telecom. That helped it add operations in Kuwait, Tunisia, Algeria, Saudi Arabia and the Maldives.

From the second-quarter, Qtel added earnings of Iraq's Asia Cell for Communication LLC, of which it owns 30 percent. AsiaCell's Iraq operations contributed 15 percent of its revenue in the first-half.

Qtel said it recorded an EBITDA, or operating profit margin, of 49 percent in the second quarter compared with 50 percent a year earlier. EBITDA is earnings before interest, tax, depreciation and amortization.

Qatar, Qtel's home market, contributed 32 percent of its revenue in the first half and grew 21 percent, with the number of mobile subscribers increasing to 1.4 million, it said.

Qtel shares fell 1.9 percent to 155 riyals on the Doha Securities Market at 10:45 a.m. local time, valuing the company at 22.7 billion riyals. The shares have dropped 20 percent this year.

To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.netArif Sharif in Dubai at asharif2@bloomberg.net