DUBAI Qatari telecom company Ooredoo reported near-flat annual profit on Tuesday as improved earnings from its Gulf operations offset worsening performance in Iraq and Tunisia and widespread foreign-exchange losses.
Ooredoo, which operates in a dozen territories across the Middle East, Africa and Asia, has seen its shares tumble 44 percent from a 2014 high -- roughly tracking a sustained earnings slump -- and could face further selling pressure after proposing to cut its annual dividend to 3 riyals per share from 4 riyals the previous year.
Ooredoo was credited with being the savviest of the Gulf's former monopolies that pursued rapid expansion abroad over the past decade. It recruited seasoned executives to run its foreign arm and their expertise helped the company to choose well in its purchases.
But that record has faltered since the latter part of 2013, partly due to problems beyond its control, as war, civil unrest and currency weakness hammered its operations in Iraq, Tunisia and Indonesia.
Ooredoo’s 2015 net profit was 2.12 billion riyals ($582.3 million), against 2.13 billion riyals in 2014, it said in a statement.
Its domestic business increased annual profit by 11 percent to 2.14 billion riyals, which is close to the group total.
“Despite currency volatility in emerging markets and the security situation in Iraq, our underlying financial and operational performance was solid,” Ooredoo Chairman Sheikh Abdulla Bin Mohammed Bin Saud Al-Thani said in the statement.
The Ooredoo businesses in neighboring Kuwait and Oman posted profit increases of 25 percent and 20 percent to 237 million riyals and 394 million riyals respectively, but the poorer, more competitive markets outside the Gulf proved tougher. In Iraq, subsidiary Asiacell's 2015 profit plunged to 159 million riyals from 1.03 billion riyals in 2014, which Ooredoo blamed on network shutdowns and higher depreciation and amortization costs after buying 3G mobile frequencies.
Indonesia's Indosat narrowed its annual loss to 320 million riyals from 564 million riyals, while its Algeria division posted a 7 percent rise in profit to 244 million riyals and Tunisia suffered a near-50 percent profit fall to 147 million riyals. Ooredoo group also reported a more than 550 percent leap in fourth-quarter profit, rising to 360 million riyals from 55 million riyals a year earlier. The year-on-year comparison was flattered by one-off costs booked in the same period of 2014 and the quarterly result was less than the 465 million riyals forecast by SICO Bahrain.
(Editing by David Goodman)