Palestine Telecommunications Company (PalTel) Announces Financial Results for H1-2011

RAMALLAH, Palestine, July 29, 2011 -

• 11.0% Growth in Net Revenues to reach US$ 257m
• 16.3% Growth in EBITDA to reach US$ 115m
• 16.3% Growth in Operating Income (EBIT) to reach US$ 91m
• 16.6% Growth rate in Net Income
• Net Income reached US$ 67m
• Total Assets reached US$ 762m
• Shareholders Equity reached US$ 545m

H1-2011 Results

Sabih Masri, Chairman of the Palestine Telecommunications Company, PalTel announced the financial results for the first half of 2011 at a Board of Directors meeting held on July 27, 2011 in Amman, Jordan.  

Consolidated net operating revenues grew by 11.0% to reach US$ 257m at the end of H1-2011 compared with US$ 231m at the end of H1-2010.  In regards to the operating revenues of each segment, the company achieved a growth in its mobile, fixed Line and data revenues by 13.5%, 3.4%, and 67.2% respectively.

The consolidated operating income for the company reached US$ 91m by the end of H1-2011 compared with US$ 78m by the end of H1-2010, a growth of 16.3%.  This growth was achieved by an increase in consolidated revenues and in light of the positive effect of the new operating policy (strategy) focusing management efforts on core telecom functions and outsourcing support functions.

The consolidated net income increased by 16.6% to stand at US$ 67m at the end of H1-2011 compared with US$ 58m at the end of H1-2010.  The increase is operational driven (increase in operating income) with the other expenses including investment gains/losses, interest expense and other non-recurring expenses having a relatively minor effect on the percentage change mentioned above.  

Sabih Masri, Chairman of PalTel, emphasized that “the financial statements are a clear indication of our focus upon our core business operations in the fixed, mobile and data services which has further allowed our team to strive in our technical and administrative abilities to further develop our strategy in terms of current services and processes that utilize the latest technological developments.  Masri further stated that “such developments have proved to be vital in providing our customers what they need; improving current services being offered and growing our subscriber base. Our growth in performance is a direct result of the efforts of the Group companies in providing the latest developments in information and technology combined with its determination to lead the Palestinian community in providing advanced services in mobile, fixed and data communications for the benefit of all customers.”      

Ammar Aker, CEO of Paltel Group, stated, “Our continued efforts and progress during the first half of the year has resulted in an increase in revenues and profits in all Paltel Group companies which is an indication of our hard working team’s abilities to adapt and adjust to the demands of the competitive market.  The expansion in our core services to improve the quality and satisfaction for customers is being carried out in both the West Bank and Gaza Strip, where the network in the Gaza Strip has improved in recent months due to our ability to transfer equipment into the area which has led to an increase in campaigns and improvement of services.”  Aker also added that, “the Group companies are launching campaigns that stress technological developments that are in touch with global developments in telecom services in order to reach out to all Palestinian communities.  Such efforts are directly reflected in our positive growth in the market, where we continue to develop information technology services to meet the demand of all stakeholders.”    

Current Operating Performance

Fixed Line

The number of fixed line subscribers witnessed 5.7% growth rate to stand at 383K subscribers compared with 362K as of the end of FY-2010. This growth resulted from new acquisition campaigns.  

The average monthly revenue per fixed line subscriber reached US$21.7 at the end of H1-2011 compared with US$22.3 at the end of FY-2010 and US$21.2 at the end of H1-2010.

Mobile

Mobile subscribers grew by 2.5% to stand at 2.31m at the end of H1-2011 compared with 2.26m at the end of FY-2010, and grew by 11.75% compared with the end of H1-2010 where the total number of subscribers was 2.07m. The composition (split between) of the prepaid and postpaid subscribers was 90.3% and 9.7% 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 by 2.4% to reach US$15.0/subscriber/month during the first half of 2011 compared with US$15.4/subscriber/month in H1-2010, while it stood in line with the figure for FY-2010 where it was US$15.0/subscriber/month. This decrease in the ARPU H1-2011 vs. H1-2010 is attributable to the larger customer base, low ARPU of the new customers and to offering larger discounts to the customers.

Data

The data segment achieved a 27.6% growth rate in the number of ADSL lines to stand at 138K lines by the end of H1-2011 compared with 108K lines as of the end of FY-2010, and grew by 34.5% compared to H1-2010 where the base was 102K lines. This increase in customer base was accompanied by a decline in ARPU which reached US$21.6 in H1-2011 compared to US$25.4 by year end 2010. In addition, penetration rate of the ADSL lines (per landline) increased from 29.8% at the end of FY-2010 to 35.9% at the end of H1-2011.

Future Outlook

The company will continue to grow its customer base in its core services, Mobile, Fixed Line and Data services while meeting the demands of current customers who will be able to benefit from technological developments while receiving high quality and added value services.  Since some equipment is able to enter the Gaza Strip, we will continue to provide services to more than 40% of our customer base.  With more than 82% market share and with 50% penetration rate, we are still confident of capturing future growth in the telecom market in the Palestinian territories.

About Paltel

Palestine Telecommunication Company (”PalTel”) is an integrated telecom operator offering fixed, mobile, Internet and data services throughout The Palestinian Territories. Paltel is publicly listed on the Palestinian Stock Exchange (PSE). Paltel owns majority equity ownership in Paltel (fixed line operator), Jawwal (Mobile Operator), Reach (Call Centre services), Palmedia (Information and 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. As at 30 June 2011, Paltel had 2.31 million mobile customers, 383K fixed line customers and 138K ADSL customers. For more information, please visit www.paltelgroup.ps

Contact Person
Ms. Neda Morrar
Director of International Corporate Communications
Paltel Group
Tel: +970-2-294-4006
Mob: +970-599-579-355
neda.morrar@paltelgroup.ps

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