Paltel Group Reports Revenues of US$ 516 Million and a Net Profit of US$ 115.8 Million in its 2012 Preliminary End of Year Results
RAMALLAH, Palestine, February 25, 2013 /PRNewswire/ --
Paltel Group, the telecommunications leader in Palestine providing mobile, fixed and data services announced today its preliminary results for the year ending 31 December 2012. The results reflect stable performance across operating indicators and growth in EBT despite the current economic downturn in Palestine. The country continues to be affected by changes in the taxation laws, fluctuation in currency exchange rates and the overall slowdown in economic activities in the region.
The consolidated net operating revenues reached US$ 516 million compared with US$ 522.7 million in 2011 reflecting a decrease of 1.3% from the previous year. The Earnings before Tax (EBT) reached US$ 149 million compared with US$ 142.5 reflecting a growth in EBT of 4.6% and this reflects a steady growth in operational indicators from last year. Net income reached US$ 115.8 million compared with US$ 128 million reflecting a decrease of 9.5% from the previous year which is attributed to the government decision to postpone the investment encouragement 50% tax exemption for an additional two years. In addition, the tax has been raised from 7.5% in the previous year to 20% in 2012 as per a new tax law that was implemented the beginning of 2012 to raise the income tax from 15% to 20%.
Sabih Masri, Chairman of the Paltel Group Board of Directors, stated, "The consolidated net operating revenues and the net income do not solely reflect the performance indicators of the Group. On the contrary, the Group achieved significant growth in its customer base in both the fixed and mobile lines which also applies to ADSL subscribers." Masri further added, "The economic crisis the government is currently facing, coupled with the current challenges in the economy in general and fluctuations of exchange rates, have affected the net income of the Group in the year 2012. In spite of continued external challenges, the Group maintains core investments in the telecom infrastructure in Palestine and foresees future opportunities in this promising sector."
Ammar Aker, CEO of Paltel Group, stated, "The Group's operating environment remains influenced by a string of challenges and they are manifested by a deepening economic crisis, increase in tax tariffs, fluctuating exchange rates, increase in infrastructure development costs; all contributing to placing a strain on the financial performance of the Group. These challenges are further exacerbated by additional Israeli obstacles towards the Group's efforts to obtain 3G and 4G frequencies which we perceive as an opportunity for future growth and more development in the telecom sector in Palestine. We are still hopeful to succeed in obtaining these frequencies in order to provide 3G and 4G services to our customers in the near future."
Aker added, "Paltel Group is slated to witness a new era after the upgrade of the Palestine status at the UN, to a non member state, thus in turn creating an urgency for more digital exposure and a knowledge economy as Palestine aggressively pursues its rights in frequencies as a member of the global community of nations. We are also endowed in Palestine with a younger generation that is much attuned to the latest in global technology development to which we respond by developing the IT infrastructure and by launching creative initiatives for Palestinian youth, such as the Mobile Applications Development Initiative (MADI) in 2012."
Aker concluded by saying, "The Group is proud of the year 2012's qualitative achievements; these results continue to motivate us to invest more efforts in the future. Paltel Group remains committed to working with all relevant parties to lead the IT and telecom sector in Palestine. That, in addition to the Group's commitment to its social responsibility based on its belief in the importance of community empowerment and sustainability to help an aspiring young generation of Palestinians to look ahead for a future filled with advanced technology in Palestine. We live in a country that is young but offers promising yields."
Financial Performance (in Jordanian Dinar)
Income Statement
2012 2011
JD '000s JD '000s
Revenues 365,852 370,605
Telecommunication services costs (32,374) (29,728)
License fees (26,636) (27,185)
Other costs (23,085) (25,215)
283,757 288,477
Operating and administrative expenses (171,698) (161,036)
Loss from investments (6,845) (18,169)
Finance costs (1,478) (2,127)
Other revenues (expenses) 1,903 (6,135)
Profit before income tax 105,639 101,010
Income tax expense (23,507) (10,266)
Profit for the year 82,132 90,744
Basic and diluted earnings per share 0.624 0.689
Consolidated Statement of Financial Position
2012 2011
JD '000s JD '000s
Assets
Non-current assets
Property, plant and equipment 198,651 207,508
Intangible assets 34,264 29,722
Projects in progress 3,503 6,809
Materials 15,827 16,229
Investment in associates 35,790 44,124
Available-for-sale investments 84,718 49,818
Investment properties 7,138 6,753
Other non-current financial assets 52,678 21,270
432,569 382,233
Current assets
Inventories 8,881 6,592
Accounts receivable 93,379 74,607
Prepayments and other current assets 25,565 39,988
Financial assets held for trading 7,414 8,243
Cash and cash equivalents 46,213 63,179
181,452 192,609
Total Assets 614,021 574,842
Equity and liabilities
Equity
Paid-in share capital 131,625 131,625
Statutory reserve 32,906 32,906
Voluntary reserve 6,756 6,756
Special reserve 7,950 7,950
Foreign currency translation (50) (31)
Available-for-sale reserve (3,093) (973)
Retained earnings 279,979 250,497
Total equity 456,073 428,730
Non-current liabilities
Non-current interest-bearing loans and
borrowings 7,090 21,270
Provision for employees' indemnity 29,151 26,112
36,241 47,382
Current liabilities
Accounts payable 41,907 32,414
Current interest-bearing loans and
borrowings 15,198 14,180
Provision for income tax 4,373 2,967
Other current liabilities 60,229 49,169
121,707 98,730
Total liabilities 157,948 146,112
Total Equity and Liabilities 614,021 574,842
Operating Performance
Fixed Line
The number of fixed line subscribers witnessed 2.9% growth rate to stand at 396 K subscribers compared with 385 K as of the end of year 2011. This growth resulted from new acquisition campaigns. The average monthly revenue per fixed line subscriber reached US$ 19.2 at the end of 2012 compared with US$ 21.2 at the end of 2011.
Mobile
Mobile subscribers grew by 6.4% to stand at 2.58 M at the end of 2012 compared with 2.42 M at the end of 2011. The composition (split between) of the prepaid and postpaid subscribers remained 90% and 10% 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 to US$ 13/subscriber/month during year 2012 compared with US$14.7 in the year 2011. This decrease in the ARPU is attributable to the larger customer base, low ARPU of new customers, offering larger discounts to the customers and the exchange rate differential.
Data
The data segment achieved an 18.9% growth rate in the number of ADSL lines to stand at 185 K lines by the end of 2012 compared with 156 K lines as of the end of 2011. This increase in customer base was accompanied by a decline of 26.4% in the monthly ARPU in 2012 compared by the monthly ARPU of 2011. In addition, penetration rate of the ADSL lines (per landline) increased from 40.5% at the end of 2011 to 46.8% at the end of 2012.
Future Outlook
The company is maintaining stability in its operating indicators, maintaining customer loyalty and investing in technology upgrades to prepare for a buoyant future where growth would come as a result of reliable and added value services and expansion into Area C and other under-serviced populated centers in Palestine. The company will continue to employ a long term strategy despite the negative effects of the continued short-term economic downturn in the country. With more than 82% market share and more than 78% penetration rate, we are still confident of capturing future growth in the telecom market in the Palestinian territories, especially once our rights in 3G frequencies are granted.
About Paltel
Palestine Telecommunication Company "PalTel" is an integrated telecom operator offering fixed, mobile, Internet and data services throughout Palestine. Paltel is publicly listed on the Palestinian Stock Exchange (PEX). Paltel owns a majority equity ownership in Paltel (fixed line operator), Jawwal (Mobile Operator), Reach (Call Centre services), Palmedia (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. For more information, please visit http://www.paltelgroup.ps
For further information please contact
Ms. Fareeda Diab
Director of Investor Relations
Paltel Group
Tel: +970-2-2944004
Mob: +970-59-9000022
Fareeda.diab@paltelgroup.ps
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