Wataniya rings up second quarter profits of KD 9.3 million (USD 31.0 million)

On a quarter-to-quarter basis compared to the first quarter of 2003, profits increased by KD 2.5 million (US$ 8.3 million) from KD 6.8 million (US$ 22.7 million), a growth of 37%.

Wataniya Telecom, an affiliate of Kuwait Projects Co. (Holding) - KIPCO - recorded revenues for the second quarter of KD 31.3 million (US$ 104.3 million), against KD 21.7 million (US$ 72.3 million) for the same quarter of 2002, and revenues increased by KD 4.2 million, or 15%, compared to the first quarter of 2003.

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) for the second quarter were KD 12.0 million (US$ 40 million), against KD 8.4 million (US$ 28.0 million), up 43%. On a quarter-to-quarter basis compared to the first quarter of 2003, EBITDA grew by KD 1.1 million (US$ 3.7 million) from KD 10.9 (US$ 36.3 million), an increase of 11%.

"The end of hostilities in the region has rejuvenated the market," said Faisal Hamad Al-Ayyar,Wataniya Telecom chairman, and managing director and chief executive officer of KIPCO. "There is great demand for our services, as can be seen from our numbers. We have just introduced GPRS and MMS, as handsets in Kuwait able to utilise these services are now abundant in the marketplace. It is exciting to see colour Action clips combined with voice being sent easily over our network."

Strong demand for Wataniya Telecom services in Kuwait continued throughout the second quarter, with the company increasing its customer base by 59,031 to close the quarter with 750,585 active customers and maintain an estimated 50% share of the Kuwait mobile phone market. This represents an increase of 21.9% over the year-end 2002 customer base of 615,791. Roaming coverage grew to 239 operators in 102 countries.

The Average second quarter Recurring Monthly Revenue per customer (ARPU), excluding roaming, increased to KD 12.7 (US$ 42.3), compared to KD 12.2 (US$40.7) for the first quarter. In the second quarter, post-paid ARPU, excluding roaming, grew to KD24.7 (US$ 82.3), and pre-paid ARPU increased to KD 11.8 (US$ 39.3).

Second quarter revenues at Tunisiana, Wataniya Telecom's joint venture GSM operator in Tunisia, were up 29% on the first quarter to KD 7.1 million (US$ 23.7 million), compared to KD 5.5 million (US$ 18.3 million). EBITDA was KD 1.6 million (US$ 5.3 million), against KD 2.1 million (US$6.9 million) in the first quarter. The post-tax loss was KD 1.5 million (US$ 5.0 million), compared to KD 0.61 million (US$ 2.0 million in the first quarter. Tunisiana's active subscriber base reached 251, 656 as of June 30. The net attributable loss to Wataniya Telecom from Tunisiana is KD 1.0 million (US$ 3.3 million year to date.

"Competition in the Tunisian market has clearly stimulated demand," said Mr. Al-Ayyar. "When we entered the market there were approximately 400,000 subscribers. Now, just six months after our successful launch of service, there are more than 1.1 million GSM subscribers in Tunisia. Tunisiana is EBITDA-positive and we expect to break even soon."

Wataniya Telecom was established in 1997 by Emiri decree and awarded the second mobile telephone license in Kuwait. It is the country's leading mobile telecom service provider with a market share of more than 50%

KIPCO, one of the leading diversified holding companies in the Middle East and North Africa, is a major regional force in Financial Services, and Media and Technology. Headquartered in Kuwait, it is the country's largest private sector company and employs more than 10,000 people internationally. Its shares are publicly traded on the Kuwait Stock Exchange.