MTC announces 2004 consolidated results

MTC is the leading wireless services operator in Kuwait and Jordan as well as one of the leading regional operators also serving customers in Bahrain, Iraq, and Lebanon. The group's operating companies' ended 2004 providing wireless services to 3.192 million active customers. The financial statements presented by the Board of Directors show that MTC has recorded 2004 consolidated revenues of KD 322.33 million. The MTC group of companies has posted an EBITDA of KD 175.27 million maintaining an EBITDA margin of 54.4%. MTC's consolidated net income for the year ended 2004 was KD 120.24 million translating to Earnings per Share of 237 Fils.

Mr. Ahmed Al-Nassar, MTC Chairman of the Board and Managing Director said: "On behalf of the MTC Board of Directors and myself, I would like to thank all our customers for selecting the MTC group as their wireless service provider. The products and services that MTC offers have become an integral part of life and we have maintained our commitment to provide the highest quality of service, the best technology, and the most attractive financial proposition to all our stakeholders. In an era of increasing competition, the company has simultaneously expanded its operations and improved its bottom line performance. MTC has posted earnings of 237 Fils per share for the year 2004 an increase of 18% compared to last year and that represents an increase in Shareholders' equity from KD 336 million to KD 389 million or a 16% increase this year. The Board of Directors has called for the general assembly meeting of shareholders to take place in mid March, 2005. The Board has recommended a distribution of 160% (160 Fils per share) and a 7% share bonus subject to general assembly and statutory approvals".

Operational Highlights
As of December 31st, 2004 the MTC group of companies is serving a growing customer base of over 3.192 million active customers in Kuwait, Jordan, Bahrain, Iraq, and Lebanon reflecting an increase of 66.26% when compared to December 31st, 2003. MTC's management is confident that the group will achieve its very ambitious target of serving 5 million customers by year end 2005. This target is one of the measures that quantifies phase one of the 3x3x3 strategy put in place by Dr. Saad Al-Barrak when he took the helm of the company and began its transformation to a leading regional wireless service provider in early 2003.

Financial Highlights
MTC has recorded full year 2004 consolidated revenues of KD 322.327 million (USD 1.1 billion) an increase of 22.74% over the same period of 2003. During the fourth quarter of 2004 MTC consolidated revenues were KD 85.519 million representing an increase of 24.2% over the same period of 2003. The consolidated EBITDA for 2004 improved by 14.55% to reach KD 175.26 million (USD 598 million) representing an EBITDA margin of 54.4% a slight decrease from last year. MTC has announced consolidated net income of KD 120.24 million (USD 410 million) an increase of 18% over the 2003 figure of KD 102.21 million. This figure represents earnings per share of 237 Fils (81 cents) for 2004, an increase of 36 Fils compared to the results for 2003 of 201 Fils (68 cents) per share. MTC shareholders received a 5% stock dividend during last year (April 2004) after the shareholder meeting.

Dr. Saad Al-Barrak, MTC Director General said: "During 2004, our customer base in Kuwait has increased by 29.42% to exceed 1.26 million active customers representing a market share of 60% an increase of almost 3% compared to last year. Providing our customers with the latest technology at the best price in the form of customer driven solutions has allowed MTC to exceed all its budget projections during 2004. These accomplishments reflect the hard work and dedication of the MTC Group's employees and partners, especially the MTC Kuwait organization and confirms that we have the technical knowledge, the management experience, and the customer driven culture that will allow us to successfully execute our 3x3x3 strategy. The lessons learned during the past two years are allowing us to leverage from the synergy created throughout the MTC group of companies translating to operational and financial performance excellence".

Dr. Saad went on to add: "I would like to emphasize that management is exploring attractiveexpansion opportunities in order to meet our stated ultimate ambitions of becoming a leading global wireless service provider. We expect 2005 to be a pivotal year as it represents the last year prior to the transition from a regional player to an international wireless service provider. The competition in the industry is more aggressive while global valuations have increased and consolidation is imposing scale and scope on the firms that will excel in the future. Consolidation in the form of alliances, mergers and acquisitions will be the near term driver of this industry especially in Emerging markets that represent growth. MTC is well positioned to maintain its regional leadership position in the industry. We will ensure the successful transition to an international leadership position by relying on delighting our customers and exceeding their expectations, rewarding our employees, and providing the best returns to our shareholders".

Selected operational and financial highlights

KUWAIT
The total number of subscribers for MTC Vodafone reached 1.262 million at December 31, 2004. This is an increase of 29.42% during the year. MTC Vodafone has an estimated 60% market share while the penetration rate of mobile customers in Kuwait is approaching 85% of the total population. Postpaid customers account for 26.4% of our total customers. Blended ARPU for 2004 was USD 48.

MTC Vodafone Kuwait is reinforcing its leadership position in Kuwait by adopting customer driven marketing strategies. The successful roll out of Data, MMS, GPRS and EDGE services has allowed MTC Vodafone Kuwait customers to enjoy and benefit from the most technically advanced and commercially attractive offers in the region. The company is enhancing the customer experience through the application of world class solutions.

JORDAN
In Jordan, MTC's operating subsidiary PELLA (Fastlink) maintained its market leadership position by all financial and operating measures. Fastlink maintained an estimated 71% market share with 1.14 million customers posting an increase of 22.6% over last year. Total revenues increased by 17% when compared to 2003. Net profit improved during 2004 by 34% over last year reflecting the implementation of better management systems and efficiencies. Fastlink is facing increased competition in one of the most liberalized markets in the Middle East. Jordan currently has 3 wireless service providers with a new company expected to launch its services in June 2005.

BAHRAIN
During 2004, MTC Vodafone Bahrain has increased its active customer base by over 100,000 new customers. MTC Vodafone Bahrain had a 16% market share at the end of 2004. The company has deployed the latest 3G technology. Bahrain is the first country in the world to have national 3G coverage as a result of MTC Vodafone Bahrain's network. The company has established itself as an integral part of the Bahrain society. The company's proactive posture with the local community such as participation in the drive to provide University of Bahrain students access to laptop computers with wireless 3G access, is one of the main drivers in reaching the milestone of 100,000 active customers well ahead of budget and target.

IRAQ
MTC Atheer has been in operation for 10 months. As of December 31st, 2004 Atheer's total active customers reached 244,338 an increase of 71% over September 30, 2004. Prepaid customers account for 99% of the customer base. Atheer's management and employees are challenged to meet the demand for service and they will be well positioned to take advantage of the opportunity to expand beyond the Southern region of Iraq. The company plans to expand the area it serves by providing service to the Central region of Iraq. This will force the company to accelerate network rollout increasing both capacity and coverage in order to accommodate more customers. Atheer's management and shareholders have adopted a policy of employing 100% Iraqi nationals in Iraq to strengthen the bonds between the company and the community it serves. The company is also committed to a very ambitious capital expenditure plan during 2005 in order to meet its goal of 1 million customers.

LEBANON
The most recent addition to the MTC Group is MTC Touch. The company has been in operation for 7 months. As of December 31st, 2004 the total number of customers served by the network has reached 441,211 representing a 4% increase over September 30th, 2004. The 48 month management contract awarded to MTC by the Lebanese government has allowed the MTC Group to expand its regional presence while enhancing and maximizing all stakeholders' interests and returns. MTC has introduced a new brand for the Lebanese network it operates. MTC Touch is the newest addition to the portfolio of Brands under the MTC umbrella.