Qatar Telecom blames FX losses for first quarter profit drop

Qatar Telecom (Qtel) on Sunday reported a 12 percent drop in first-quarter net profit, citing mainly foreign exchange losses, but the former monopoly still beat forecasts.
Qtel made a profit of 711 million riyals ($195.29 million) in the three months to March 31, down from 811 million riyals in the year-earlier period.
"Net profit during the period was adversely impacted by movement in the Indonesian currency," Qtel said in an emailed statement. "Net profit decreased mainly due to foreign exchange losses in (Indonesian subsidiary) Indosat." Analysts polled by Reuters on average forecast Qtel would make a quarterly profit of 599 million riyals.
Quarterly revenue was 8.03 billion riyals, up 7.6 percent from the corresponding period of 2011.
The former monopoly has operations in a dozen countries and owns majority stakes in Kuwait-based Wataniya and Oman's Nawras, which this month reported first-quarter profit declines of 90 and 19 percent respectively. Wataniya's first-quarter 2011 earnings were boosted by a one-off fair value gain.
Qtel said it had 84.4 million customers on a consolidated basis at end of the first quarter, up 11.7 percent from a year ago.
Indosat - 65 percent owned by Qtel - accounted for 62 percent of this total, with the unit's revenues flat at 2 billion riyals in the first quarter.
"Market conditions in Indonesia have remained challenging," Qtel said.
Qtel said it had 2.4 million domestic customers, the same as a year earlier. Qatar's mobile penetration is 132 percent, or 1.3 mobile subscriptions per person, according to the International Telecommunications Union.
Quarterly domestic revenue rose 6.4 percent year-on-year to 1.5 billion riyals. Iraqi affiliate Asiacell's quarterly revenue rose 19 percent to 1.6 billion riyals.
Asiacell and two other Iraqi telecom companies - Korek Telecom, part-owned by France Telecom and logistics firm Agility, and Zain Iraq, a unit of Kuwait's Zain - have yet to launch initial public offerings, depsite being required to sell a quarter of their shares by Auguest 2011.
Qtel is keen to expand via acquisitions while also growing organically in countries like Tunisia, Algeria, and Iraq where its existing mobile and fixed networks need major investment, its CEO told Reuters in March.