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Palestine Telecommunications Company (PalTel) Announces Financial Results for H1-2011

July 29, 2011

RAMALLAH, Palestine, July 29, 2011 /PRNewswire/ –

        - 11.0% Growth in Net Revenues to reach US$ 257m
        - 16.3% Growth in EBITDA to reach US$ 115m
        - 16.3% Growth in Operating Income (EBIT) to reach US$ 91m
        - 16.6% Growth rate in Net Income
        - Net Income reached US$ 67m
        - Total Assets reached US$ 762m
        - Shareholders Equity reached US$ 545m

H1-2011 Results

Sabih Masri, Chairman of the Palestine Telecommunications Company,
PalTel announced the financial results for the first half of 2011 at a Board
of Directors meeting held on July 27, 2011 in Amman, Jordan.

Consolidated net operating revenues grew by 11.0% to reach US$ 257m at
the end of H1-2011 compared with US$ 231m at the end of H1-2010. In regards
to the operating revenues of each segment, the company achieved a growth in
its mobile, fixed Line and data revenues by 13.5%, 3.4%, and 67.2%
respectively.

The consolidated operating income for the company reached US$ 91m by the
end of H1-2011 compared with US$ 78m by the end of H1-2010, a growth of
16.3%. This growth was achieved by an increase in consolidated revenues and
in light of the positive effect of the new operating policy (strategy)
focusing management efforts on core telecom functions and outsourcing
support functions.

The consolidated net income increased by 16.6% to stand at US$ 67m at
the end of H1-2011 compared with US$ 58m at the end of H1-2010. The increase
is operational driven (increase in operating income) with the other expenses
including investment gains/losses, interest expense and other non-recurring
expenses having a relatively minor effect on the percentage change mentioned
above.

Sabih Masri, Chairman of PalTel, emphasized that “the financial
statements are a clear indication of our focus upon our core business
operations in the fixed, mobile and data services which has further allowed
our team to strive in our technical and administrative abilities to further
develop our strategy in terms of current services and processes that utilize
the latest technological developments. Masri further stated that “such
developments have proved to be vital in providing our customers what they
need; improving current services being offered and growing our subscriber
base. Our growth in performance is a direct result of the efforts of the
Group companies in providing the latest developments in information and
technology combined with its determination to lead the Palestinian community
in providing advanced services in mobile, fixed and data communications for
the benefit of all customers.”

Ammar Aker, CEO of Paltel Group, stated, “Our continued efforts and
progress during the first half of the year has resulted in an increase in
revenues and profits in all Paltel Group companies which is an indication of
our hard working team’s abilities to adapt and adjust to the demands of the
competitive market. The expansion in our core services to improve the
quality and satisfaction for customers is being carried out in both the West
Bank and Gaza Strip, where the network in the Gaza Strip has improved in
recent months due to our ability to transfer equipment into the area which
has led to an increase in campaigns and improvement of services.” Aker also
added that, “the Group companies are launching campaigns that stress
technological developments that are in touch with global developments in
telecom services in order to reach out to all Palestinian communities. Such
efforts are directly reflected in our positive growth in the market, where
we continue to develop information technology services to meet the demand of
all stakeholders.”

Current Operating Performance

Fixed Line

The number of fixed line subscribers witnessed 5.7% growth rate to stand
at 383K subscribers compared with 362K as of the end of FY-2010. This growth
resulted from new acquisition campaigns.

The average monthly revenue per fixed line subscriber reached US$21.7 at
the end of H1-2011 compared with US$22.3 at the end of FY-2010 and US$21.2
at the end of H1-2010.

Mobile

Mobile subscribers grew by 2.5% to stand at 2.31m at the end of H1-2011
compared with 2.26m at the end of FY-2010, and grew by 11.75% compared with
the end of H1-2010 where the total number of subscribers was 2.07m. The
composition (split between) of the prepaid and postpaid subscribers was
90.3% and 9.7% respectively.

This growth in the number of mobile subscribers was affected by several
acquisition campaigns and new products and services that targeted existing
and prospective customers.

The blended ARPU declined by 2.4% to reach US$15.0/subscriber/month
during the first half of 2011 compared with US$15.4/subscriber/month in
H1-2010, while it stood in line with the figure for FY-2010 where it was
US$15.0/subscriber/month. This decrease in the ARPU H1-2011 vs. H1-2010 is
attributable to the larger customer base, low ARPU of the new customers and
to offering larger discounts to the customers.

Data

The data segment achieved a 27.6% growth rate in the number of ADSL
lines to stand at 138K lines by the end of H1-2011 compared with 108K lines
as of the end of FY-2010, and grew by 34.5% compared to H1-2010 where the
base was 102K lines. This increase in customer base was accompanied by a
decline in ARPU which reached US$21.6 in H1-2011 compared to US$25.4 by year
end 2010. In addition, penetration rate of the ADSL lines (per landline)
increased from 29.8% at the end of FY-2010 to 35.9% at the end of H1-2011.

Future Outlook

The company will continue to grow its customer base in its core
services, Mobile, Fixed Line and Data services while meeting the demands of
current customers who will be able to benefit from technological
developments while receiving high quality and added value services. Since
some equipment is able to enter the Gaza Strip, we will continue to provide
services to more than 40% of our customer base. With more than 82% market
share and with 50% penetration rate, we are still confident of capturing
future growth in the telecom market in the Palestinian territories.

About Paltel

Palestine Telecommunication Company (“PalTel”) is an integrated telecom
operator offering fixed, mobile, Internet and data services throughout The
Palestinian Territories. Paltel is publicly listed on the Palestinian Stock
Exchange (PSE). Paltel owns majority equity ownership in Paltel (fixed line
operator), Jawwal (Mobile Operator), Reach (Call Centre services), Palmedia
(Information and Media Services Provider), Hulul (Business Solutions
Provider) and Hadara (ISP Services). Paltel also owns equity in Vtel
Holdings a Dubai-based multinational telecommunications company with
interests in Middle East, Asia and Europe. As at 30 June 2011, Paltel had
2.31 million mobile customers, 383K fixed line customers and 138K ADSL
customers. For more information, please visit http://www.paltelgroup.ps

        Contact Person
        Ms. Neda Morrar
        Director of International Corporate Communications
        Paltel Group
        Tel: +970-2-294-4006
        Mob: +970-599-579-355
        neda.morrar@paltelgroup.ps

SOURCE Paltel Group


Source: newswire