Group revenues for the first six months of 2019 grew 38 per cent to RO1.258bn against RO914.2mn in the corresponding period of 2018, Omantel said in its initial unaudited financial results report submitted to the Muscat Securities Market.
Omantel said the net profit attributable to shareholders of the company increased to RO33.2mn for the six months period ended June 30, 2019 compared to RO32.9mn in the same period of 2018.
The company said that the sharp increase in group net profit is against the backdrop of an excellent performance in key markets of Zain Group, notably in Kuwait, Saudi Arabia and Iraq.
Zain Group contributed RO114.8mn to the net profit (before non-controlling interest) of Omantel Group in the first half of this year compared to RO86.8mn in the same period of 2018. After adjusting for non-controlling interest, Zain Group contributed RO21.4mn in the first half of 2019 compared to RO18.6mn in the previous year.
‘The performance of Zain Group during half year demonstrates the underlying potential of the investment, which is also reflected by way of increase in the market value of the investment by 17.5 per cent from the date of inception of the investment,’ Omantel said.
Commenting on the results in a press statement, Talal Said al Mamari, chief executive officer of Omantel said, “We are delighted with these results, which clearly reflect the importance and success of our strategic investment in Zain Group that serves around 50mn customers in the region. Zain Group performance has enabled us not only to offset the decline witnessed in the domestic operations but rather to grow our revenues and net profits to new record levels.”
On domestic front, however, Omantel’s performance was subdued on account of significant challenges experienced due to market saturation in the mobile segment. Omantel’s domestic operations cover fixed-line business, mobile business, Omantel International, Oman Data Park and Internet of Things.
The company’s domestic revenues decreased 7.4 per cent to RO259.8mn in the first half of 2019 compared to RO283.9mn in the same period of 2018.
Omantel said its domestic operations witnessed an 8.8 per cent decline in net profit to RO39.2mn, mainly due to reduction in mobile prepaid revenues. ‘However, growth in fixed broadband, ICT and cost optimisation initiatives have contributed in managing the margins. Fixed-line revenues grew by 4 per cent year-on-year whereas mobile revenues decreased by 10.3 per cent.’
Omantel, which acquired stake in Kuwait-based Zain Group in 2017, said that the interest costs incurred by Omantel Group relating to Zain acquisition is RO26.2mn in the first half of 2019 and is accounted at the group level and is not part of domestic performance.