Earnings release for the quarter ending March 31, 2006
MTC REPORTS EXCELLENT RESULTS
THE COMPANY ANNOUNCES REVENUES OF KD 219.62 MILLION
NET INCOME OF KD 58.31 MILLION OR 47 FILS PER SHARE
FOR THE QUARTER ENDED MARCH 31, 2006
KUWAIT CITY, May 3, 2006
The Mobile Telecommunications Company K.S.C (MTC – KSE Ticker: TELE, RIC: TELE.KW, Bloomberg Code: TELE.KK) announces its first quarter 2006 results reflecting the following:
Q1 2006 Financial Highlights
|
Customers
|
15.63 million (as at March 31, 2006)
|
|
Consolidated Revenues
|
KD 219.62 million (USD 751.09 million)
|
|
EBITDA
|
KD 105.01 million (USD 359.13 million)
|
|
Net Income
|
KD 58.31 million (USD 199.40 million)
|
|
EPS
|
47 Fils (USD 0.16)
|
Key Events
On April 26 MTC Group announced the appointment of Mr. Saad Nasir as the new General Manager of Fastlink in Jordan. MTC said on April 17 that its Africa-based subsidiary Celtel had signed a conditional deal to buy 65 percent of Nigeria's Vmobile for just over $1 billion. MTC’s USD 750 million Islamic Murabaha facility was successfully syndicated on February 23. On February 15 MTC released a commissioned report titled “Mobility for One Language, Diverse Cultures” It includes ground-breaking research on the impact of mobile phones from economists, financial analysts, consultants, academics and journalists and comprises data from nine surveys conducted in seven Arab countries. On February 6 MTC announces that it has successfully concluded the acquisition of 61% of Mobitel from Sudatel in a deal valued at US$ 1.332 billion. Through its African subsidiary Celtel International, MTC increases its stake in Mobitel from the current 39% to 100%. Mobile Telecommunications Company Group (MTC), the largest GSM operator in the Middle East and Africa, announced Sunday February 5th that it is bidding for the third GSM license in Egypt."MTC’s first quarter 2006 financial and operating results are establishing new performance benchmarks for the company and they are confirming to us that the company is performing and delivering above budgets and targets approved late last year. I expect this trend to continue this year and we anticipate excellent results for the year 2006. MTC posted revenues of KD 219.62 million (USD 751.08 million) for the first quarter of 2006 up 144% from last year’s first quarter,” said Asaad Ahmed Al-Banwan, Chairman of MTC. “MTC’s net income reached KD 58.31 million (USD 199.40 million) up 42% compared to last year’s first quarter while MTC’s EBITDA reached KD 105 million (USD 359.13 million) an increase of 91%. MTC is continuing to build and add to the successes of the last 3 years. Our successful acquisition of the 61% remainder of Mobitel in Sudan and the upcoming new license opportunities we are evaluating coupled with our ongoing diligent assessment of attractive expansion opportunities in the market will allow us to continue building MTC into a global company,” added Mr. Al-Banwan. “The shareholders approved the recommended cash dividend of 85 fils per share plus the 15% stock dividend at the annual general meeting of shareholders at the end of March. MTC is maintaining its ability to deliver both growth and current returns to its shareholders placing it among a very select group of companies.”
Customers
The MTC Group is serving a growing customer base of over 15.63 million active customers in the Middle East and Africa, reflecting an increase of 348% when compared to March 31, 2005 owing to the acquisition of Celtel International. The company’s subsidiaries are consistently the leading operator in the overwhelming majority of the 19 countries where MTC operates.
|
Managed Customers (000s)
|
Q1 2006
|
Q1 2005
|
Growth
|
|
|
|
|
|
|
Bahrain
|
228
|
136
|
67%
|
|
Iraq
|
1,516
|
346
|
338%
|
|
Jordan
|
2,146
|
1,255
|
71%
|
|
Kuwait
|
1,478
|
1,307
|
13%
|
|
Lebanon
|
516
|
446
|
16%
|
|
Sudan
|
1,951
|
N/A
|
|
|
|
7,834
|
3,491
|
124%
|
|
Africa - Celtel
|
|
|
|
|
Burkina Faso
|
345
|
|
|
|
Chad
|
244
|
|
|
|
Congo Brazzaville
|
413
|
|
|
|
Democratic Republic of Congo
|
1,285
|
|
|
|
Gabon
|
393
|
|
|
|
Kenya
|
2,013
|
|
|
|
Madagascar
|
228
|
|
|
|
Malawi
|
240
|
|
|
|
Niger
|
265
|
|
|
|
Sierra Leone
|
190
|
|
|
|
Tanzania
|
1,067
|
|
|
|
Uganda
|
299
|
|
|
|
Zambia
|
812
|
|
|
|
Total
|
7,793
|
|
|
|
|
|
|
|
|
MTC Group Total
|
15,627
|
3,491
|
348%
|
Financial Results
MTC recorded consolidated revenues of KD 219.62 million (USD 751.09 million) for the 3 months ended March 31, 2006, an increase of 144% over the same period in 2005. During the 3 months, the consolidated EBITDA increased by 91% to reach KD 105.01 million (USD 359.13 million), a margin of 48%. MTC has announced consolidated net income of KD 58.31 million (USD 199.40 million), an increase of 42% compared to the same period last year, representing earnings of 47 Fils (USD 0.16) per share, 42 Fils (USD 0.14) 12% above the EPS for same period in 2005.
|
Consolidated Results
|
KD m
|
USD m
|
Growth
|
||
|
|
Q1 2006
|
Q1 2005
|
Q1 2006
|
Q1 2005
|
|
|
Revenues
|
219.62
|
90.11
|
751.09
|
144%
|
|
|
EBITDA
|
105.01
|
55.04
|
359.13
|
188.25
|
91%
|
|
EBITDA %
|
48%
|
61%
|
|
|
|
|
Net Income
|
58.31
|
41.06
|
199.40
|
140.43
|
42%
|
|
EPS
|
47 Fils
|
42 Fils
|
16 Cents
|
14 Cents
|
12%
|
Dr. Saad Al-Barrak, Managing Director-Deputy Chairman of MTC said: “The record setting results we are discussing today are the fruits of our ongoing labor over the last three years; they are the confirmation of the success of our profitable expansion strategy. Our ultimate objective of becoming a global company by implementing our 3x3x3 strategy now rests on a solid foundation that includes our Middle East operations and Celtel in Africa; the fastest growing mobile communications market in the world,” Dr. Al-Barrak added: “Our ambitions and appetite are tempered by our diligence in seeking profitable accretive expansion opportunities implemented by identifying new viable existing businesses that will be complimented by new licenses that we strive to acquire allowing MTC’s future performance to make it the premier company among its peers. The essential cornerstones of our strategy revolve around excellence, diversity and benevolence. These values permeate everything we do and they are led by our commitment to our Human resources that are our real treasure. We are fully committed to the development of our people and we are committed to ensuring that their incentives are aligned with shareholder objectives in the form of an Employee Stock Option Plan that has been approved and will be launched shortly. Our products, services and technology are tailored to meet our customers’ needs and demands. Ensuring that we address all stakeholders is complimented by our commitment to our Corporate Social Responsibility through the multiple activities sponsored by MTC and our adherence to best practices in all our activities and commitments,” concluded Dr. Al-Barrak.
Select operational and financial highlights
After the acquisition of the 61% of Mobitel that the MTC Group did not own, MTC has operationally assigned Sudan to its Middle East portfolio of operations. MTC’s operations span across 19 countries in the Middle East and Africa. During the first quarter of 2006, the African operations contributed 38% of the Group’s total Revenues of USD 751 million while Kuwait, Jordan and Sudan contributed 24%, 14% and 19% respectively. As of March 31 2006, MTC’s Middle Eastern operations managed 49% of the overall customer base of 15.63 million, with Jordan accounting for 14% of the Group’s customers whereas Sudan, Iraq, and Kuwait accounted for 12%, 10%, and 9% each. Among the African operators Kenya, Democratic Republic of Congo, and Tanzania are serving 2, 1.3, and 1 million customers each. Celtel’s is serving 51% of the group’s customers. This ratio is likely to increase in the future as the African continent is the fastest growing mobile market in the world.
Ossama M. Deeb, MTC Group Chief Financial Officer commented: “MTC has experienced phenomenal growth in the past three years. The capital increase concluded November last year has strengthened our balance sheet and will allow us to seek an optimal level of access to funds to accommodate the future growth of the Group. MTC’s executive management, following the Board of Director’s guidance, is ensuring an efficient allocation of financial resources to maximize sustainable shareholder value creation. MTC will secure a medium term revolving credit facility that will allow us discretionary access to funds while reducing the overall cost of capital.” Mr. Deeb added: “MTC now enjoys an enviable profile putting it at par with elite international companies. At its current market capitalization MTC would be in the upper half of the FTSE 100 index of LSE listed companies and given the diversification of its sources of revenues and profits, MTC will continue leveraging its scale and scope to be among the best world class companies.”
Kuwait
|
|
2006
|
2005
|
Growth
|
|
Customers (000s)
|
1,478
|
1,307
|
13%
|
|
Postpaid
|
25%
|
26%
|
|
|
Prepaid
|
75%
|
74%
|
|
|
Revenues (USD m)
|
189
|
172
|
10%
|
|
EBITDA %
|
63%
|
60%
|
|
MTC-Vodafone Kuwait’s customers totaled 1.48 million at the end of the first quarter 2006, an increase of 14% over the same period in 2005. The operation’s customers accounted for 19% of MTC customers in the Middle East and 10% of MTC’s overall customer base in the Middle East and Africa. Revenues totaled USD 189.18 million, up 10% compared to the same period last year.
Jordan
|
|
2006
|
2005
|
Growth
|
|
Customers (000s)
|
2,146
|
1,255
|
71%
|
|
Postpaid
|
10%
|
17%
|
|
|
Prepaid
|
90%
|
83%
|
|
|
Revenues (USD m)
|
112
|
110
|
2%
|
|
EBITDA %
|
46%
|
52%
|
|
Fastlink reached 2.15 customers in Jordan at the end of first 3 months of 2006, surpassing its target for the year, and maintaining a commanding market share in a very competitive market. The operation’s customers grew by about 71% year-year to reach 2.146 million and accounted for 27% of MTC customers in the Middle East and 14% of MTC’s overall customer base in the Middle East and Africa. Revenues totaled USD 112 million, up 2% from the previous year. EBITDA decreased by 10% to USD 51 million in 2006, a margin of 46%.
Bahrain
|
|
2006
|
2005
|
Growth
|
|
Customers (000s)
|
228
|
105
|
67%
|
|
Postpaid
|
13%
|
20%
|
|
|
Prepaid
|
87%
|
80%
|
|
|
Revenues (USD m)
|
24
|
13
|
77%
|
|
EBITDA %
|
32%
|
3%
|
|
MTC Vodafone Bahrain exceeded the 228 thousand customer mark at the end of first 3 months of 2006. The operation’s customers grew by 67% year-on-year and accounted for 3% of MTC customers in the Middle East. Revenues totaled USD 24 million, up by 77% compared to the same period last year. EBITDA increase by 1798% to USD 8 million in 2006 compared to USD 398 thousands in 2005.
Iraq
|
|
2006
|
2005
|
Growth
|
|
Customers (000s)
|
1,516
|
346
|
338%
|
|
Postpaid
|
4%
|
1%
|
|
|
Prepaid
|
96%
|
99%
|
|
|
Revenues (USD m)
|
69
|
20
|
240%
|
|
EBITDA %
|
38%
|
45%
|
|
MTC Atheer had 1.52 million customers at the end of first 3 months of 2006, up by 338% from 346 thousand customers compared to the same period last year. They accounted for 19% of MTC customers in the Middle East and 10% of MTC’s overall customer base in the Middle East and Africa. MTC Atheer expects the mobile sector in Iraq to become one of the largest mobile markets in the Middle East in 2006. Revenues increased from USD 69 during the first 3 months of 2006 to USD 20 million compared to the same period of last year. EBITDA reached USD 26 million in 2006, a margin of 38% for the first quarter of 2006.
Lebanon
|
|
2006
|
2005
|
Growth
|
|
Customers (000s)
|
516
|
446
|
16%
|
|
Postpaid
|
25%
|
28%
|
|
|
Prepaid
|
75%
|
72%
|
|
|
Revenues (USD m)
|
14
|
13
|
6%
|
|
EBITDA %
|
17%
|
14%
|
|
MTC Touch’s customers totaled 516 thousand at the end of first 3 months of 2006, an increase of 16% compared to the same period the year. The operation’s customers accounted for 7% of MTC customers in the Middle East and 3% of Group’s overall customer base. EBITDA reached USD 2.3 million, a margin of 17% compared to the same period the year.
Sudan
|
|
2006
|
|
Customers (000s)
|
1,951
|
|
Revenues (USD m)
|
151
|
|
EBITDA %
|
62%
|
Mobitel in Sudan is the latest addition to the MTC Group and has recently been transferred under the management of the Middle East Group. A thorough operations review is underway and MTC’s management expects to accelerate the growth of Mobitel during the next 2 years by investing in all facets of the business. During the first quarter of 2006 Mobitel posted revenues of USD 150.58 million while serving 1.95 million customers.
Africa (Celtel)
Operations
|
Ownership %
|
Customers (000s)
|
Revenues (USD m)
|
|
Burkina Faso
|
96%
|
345
|
13
|
|
Chad
|
100%
|
244
|
14
|
|
Congo Brazzaville
|
90%
|
413
|
27
|
|
Democratic Republic of Congo
|
99%
|
1,285
|
53
|
|
Gabon
|
84%
|
393
|
34
|
|
Kenya
|
60%
|
2,013
|
43
|
|
Madagascar
|
100%
|
228
|
8
|
|
Malawi
|
100%
|
240
|
8
|
|
Niger
|
70%
|
265
|
14
|
|
Sierra Leone
|
100%
|
190
|
12
|
|
Tanzania
|
60%
|
1,067
|
39
|
|
Uganda
|
100%
|
299
|
8
|
|
Zambia
|
89%
|
812
|
39
|
|
Total
|
|
7,793
|
313
|
Celtel builds and operates world-class communications networks that deliver reliable and competitive services in Africa, with operations in thirteen (excluding Sudan) African countries, under licenses that cover more than a third of the population of Africa.
Celtel has invested more than a billion dollars in Africa. As of March 31, 2006, Celtel managed 7.79 million customers in the following countries: Burkina Faso, Chad, Rep, Congo, Democratic Republic of Congo, Gabon, Kenya, Malawi, Niger, Sierra Leone, Tanzania, Uganda, and Zambia, with Madagascar being acquired in December 2005. During the first quarter of 2006, Celtel posted revenues of USD 312.96 million with an EBITDA of USD 116.44 million. The company has made a conditional offer to purchase 65% of Vmobile in Nigeria for USD 1 billion with an option to purchase the remaining shares at the same valuation.
-End-
About MTC Group
Mobile Telecommunications Company (MTC) is the pioneer of mobile services in the Middle East and now a major player in Africa. The company was established during 1983 in Kuwait as one of the region’s first mobile operators, and since the initiation of our “3x3x3” expansion strategy in 2002, we have expanded rapidly becoming the 4th largest company in the world with a footprint in 19 countries..
As a leading mobile and data services operator in six Middle Eastern and 13 sub-Saharan African countries with 7000 employees, we provide a comprehensive range of mobile voice and data services to over 15.63 million individual and business customers.
We operate in Kuwait and Bahrain as mtc-vodafone, in Jordan as Fastlink, in Iraq as mtc-atheer, in Lebanon as mtc-touch, in Sudan as Mobitel and in 13 sub-Saharan countries in Africa as Celtel: Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Kenya, Malawi, Niger, Sierra Leone, Tanzania, Uganda and Zambia and most recently Madagascar.
The Parent Company and its subsidiaries (the Group) provide mobile telecommunication services under licenses from Governments of the countries in which they operate; purchase, deliver, install, manage and maintain mobile telephone and paging systems; and invest surplus funds in investment securities.
The group recorded revenues of KD 579 million (USD 1.98 billion) and net profit of KD 186 million (USD 636 million) during the year ended December 31, 2005. The Kuwait Investment Authority owns 24.6% of the company’s shares and at year end the company had a market capitalization of USD 13.6 billion.
The Mobile Telecommunications Company KSC (the Parent Company) is a Kuwaiti shareholding company and its shares are traded on the Kuwait Stock Exchange. The Company’s share price as at March 31, 2005 was 3,220 Fils, giving a Kuwait Stock Exchange market valuation for MTC of KD 3.533 billion (USD 11.8 billion). Consolidated earnings per share for the first 3 months of 2006 were 47 Fils.
The authorized, issued, and fully paid up share capital of the Parent Company as of March 31, 2006 consists of 1,261,819,591 shares of 100 Fils each.
1 USD = KD 0.2924
For further information, please contact:
Mr Ibrahim Adel
MTC Investor Relations Manager
PO BOX 22244 Safat, 13083 Kuwait
Telephone: +965 464 4954
Fax: +965 484 6992
Email: i.adel@mtc.com.kw
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