Mobile Telecommunications Company K.S.C (MTC – KSE Ticker: TELE, RIC: TELE.KW, Bloomberg Code: TELE.KK) announces its record first half 2006 results reflecting the following:
H1 2006 Financial Highlights
Customers 22.91 million (as at June 30, 2006)
Consolidated Revenues KD 501.32 million (USD 1.72 billion)
EBITDA KD 254.06 million (USD 871.55 million)
Net Income KD 139.31 million (USD 477.92 million)
EPS 113 Fils (USD 0.39)
Key Events of the Second Quarter
On May 14th MTC mandated 4 international banks: BNP PARIBAS, CALYON, CREDIT SUISSE, and UBS to provide a USD 4 billion credit facility to be used for general corporate purposes.
On May 30th MTC acquired 65% of V-mobile, the second largest telecom company in Nigeria in a deal valued at USD 1.01 billion through its African subsidiary Celtel International. The acquisition added over 5 million customers to MTC’s portfolio.
Select Operating and Financial Highlights
MTC Group is operating in 20 countries on 2 continents serving over 22.9 million customers as of June 30, 2006 an increase of 116% compared to the same period last year. The company’s remarkable customer growth is primarily driven by its African operations; Celtel whereas its very enviable financial performance is driven by its more mature Middle Eastern operators. The company reported that its revenues exceeded KD 501 million (USD 1.72 billion) during the first six months of 2006, an increase of 122% relative to the first half of 2005. These top line numbers reflect the scale and scope of MTC’s operations today and represent very impressive growth that has been achieved through organic growth, new license awards, and acquisitions over the past three and a half years since the company embarked on its profitable expansion strategy.
"The group earned a consolidated net profit of KD 139.31 million (USD 481.13 million) for this period, these figures translate to earnings per share of 113 Fils (39 cents) showing a healthy sustainable earnings per share growth rate of over 20%,” said Mr. Asaad Ahmed Al-Banwan, Chairman of MTC. “At the same time, MTC’s EBITDA reached KD 252.36 million (USD 871.55 million) evidence of good operating efficiencies during this growth phase where the company’s operations are at various stages of their life cycle. MTC has now attained critical mass that allows it to leverage its size for the benefit of its shareholders and customers as well as providing a diversified stream of cash flows that enhance its place among its peers,” added Mr. Al-Banwan. “The record results posted by the company confirm to us that the implementation of our strategy is delivering the best results to all stakeholders and has transformed MTC into one of the leading companies in its sector. Our Board is very careful to guide management by setting ambitious thresholds with regards to growth with a keen eye on sustainable profitability. The acquisitions of the shares we did not own in Mobitel, Sudan (61%) in February coupled with the 65% of Vmobile, Nigeria that we recently concluded have added two very important new operators to our portfolio and we are continuously scanning for new profitable opportunities that will enhance our footprint further.”
Customers
MTC Group is serving a growing customer base of 22.91 million customers in the Middle East and Africa, reflecting a year-on-year increase of 116% due to organic growth and acquisitions. The company’s subsidiaries are consistently the leading operators in the overwhelming majority of the 20 countries where MTC operates.
Managed Customers (000s) H1 2006 H1 2005 Growth
Middle East
Bahrain 252 165 53%
Iraq 2,082 574 263%
Jordan 2,168 1,434 51%
Kuwait 1,515 1,381 10%
Lebanon 532 479 11%
Sudan 2,201 -
Middle East Total 8,751 4,033 117%
Celtel
Burkina Faso 383 236 62%
Chad 278 155 79%
Congo Brazzaville 462 298 55%
Democratic Republic of Congo 1,444 948 52%
Gabon 435 267 63%
Kenya 2,115 1,464 44%
Madagascar 260 -
Malawi 285 141 102%
Niger 302 147 105%
Nigeria 5,535 -
Sierra Leone 195 160 22%
Tanzania 1,164 703 66%
Uganda 334 207 61%
Zambia 964 445 117%
Celtel Total 14,157 5,173 174%
MTC Group Total 22,908 10,607 116%
Financial Results
MTC recorded consolidated revenues of KD 501.32 million (USD 1.72 billion) for the six months ended June 30, 2006, an increase of 55% over the same period in 2005. During the six months, the consolidated EBITDA increased by 81% to reach KD 254.06 million (USD 871.55 million), a margin of 51%. MTC has announced consolidated net income of KD 139.31 million (USD 477.92 million), an increase of 55% compared to the same period last year, representing earnings of 113 Fils (USD 0.39) per share, 92 Fils (USD 0.31) 23% above the EPS for same period in 2005.
Consolidated Results KD m USD m Growth
H1 2006 H1 2005 H1 2006 H1 2005
Revenues 501.32 226.73 1,719.79 776.46 121%
EBITDA 254.06 140.28 871.55 480.41 81%
EBITDA % 51% 62% 51% 62%
Net Income 139.31 89.94 477.92 308.02 55%
EPS 113 Fils 92 Fils 39 Cents 31 Cents 23%
Dr. Saad Al-Barrak, Managing Director-Deputy Chairman of MTC said: “MTC today is well positioned to deliver outstanding results to all stakeholders with its operations in the Middle East and Africa; the fastest growing wireless markets 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 such as Sudan and Nigeria 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. New license opportunities in the Middle East are being offered as a result of the deregulation and liberalization of the sector. We are pursuing several opportunities in Africa as well looking to enhance our geographic footprint. Our approach is simple however its implementation is what distinguishes MTC from its competitors. We formulated the vision and strategy that we are implementing over three years ago and now we find many competitors formulating variations of it. Being first and daring separates us from the pack. Our commitment to a unique corporate culture and to our human resources allow for the successful execution of our plans. We are fully committed to the development and empowerment 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. Integrating all of our operations gives us advantages of scale and scope that strengthen our position in the market. 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.
Sam M Deeb, MTC Group Chief Financial Officer commented: “MTC has experienced very rapid growth both organically and through acquisitions over the past three and a half years. The financing requirements of this growth have been met through a variety of means. In addition to use of existing resources, MTC secured a USD 2.4 billion bridge facility to acquire Celtel early 2005. The capital increase concluded November last year has strengthened our balance sheet allowing for early payment of the bridge loan. MTC secured a USD 750 million Islamic Murabaha facility the following month. In May 2006 we mandated four international banks: BNP PARIBAS, CALYON, CREDIT SUISSE, and UBS to arrange a 5 year USD 4 billion revolving credit facility that will be used for general corporate purposes and acquisitions. This facility will give the company the needed flexibility to meet its mid-term financing requirements while reducing our overall cost of capital. 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.” 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.”
