Qatar’s Ooredoo Q1 Net Profit Falls 43%

Qatar’s Ooredoo blamed adverse foreign exchange losses and a tough operating environment in Iraq for the telecom operator’s 43 per cent drop in first-quarter profit.

The former monopoly, which operates in about 15 countries across the Middle East, Africa and Asia, had reported declining profits in four of the previous six quarters as difficulties in Iraq and North Africa and declines in the Indonesian rupiah weighed on its bottom line.

Ooredoo posted a net profit of QAR501.2 million ($133.7 million) in the three months to March 31, down from QAR886.6 million a year earlier, it said in a statement.

The company said excluding foreign exchange losses, which were primarily from weaker Algerian and Indonesian currencies, its first quarter profit fell four per cent, rather than the reported 43 per cent.

EFG Hermes and SICO Bahrain had forecast majority state-owned Ooredoo would make a quarterly profit of QAR397.1 million and QAR675 million respectively.

“Results have been strong in our home market, Qatar, and in Oman,” Ooredoo Chief Executive Nasser Marafih said in the statement. “We are facing challenges in some of our markets including high levels of competition, adverse currency movements and the security situation in Iraq.”

First-quarter revenue was QAR8.04 billion, down from QAR8.10 billion a year earlier despite the company increasing its subscriber base by 14 per cent to 111 million over the same period.

Ooredoo’s quarterly net profit from its domestic operations nearly doubled to QAR616 million from QAR327 million a year earlier, outpacing a 16 per cent rise in revenue.

Iraqi subsidiary Asiacell’s quarterly net profit was QAR49 million, down 84 per cent year-on-year despite January’s launch of 3G services.

Ooredoo reported in a 2014 annual results presentation that Asiacell’s network was suspended in Mosul, Salahaldin, Anbar and Tikrit – areas held by Islamic State.

Indonesian unit Indosat made a net loss of QAR121 million in the first quarter versus a profit of QAR261 million a year earlier.

Ooredoo Kuwait – 92 per cent owned by Ooredoo and with operations in Algeria, Tunisia, the Maldives and the Palestinian Territories – reported an 89 per cent drop in first-quarter profit on Monday that it also blamed on hefty foreign exchange losses.