Wataniya Telecom posts KD 12.2 million net profit in Qtr 1 - 2005

In March 2005, the company's Wataniya International subsidiary signed a management agreement with Saudi Arabia's Public Telecommunications Company (PTC) and will manage the operations of it's digital trunked cellular network.

"We are pleased to announce that the company experienced a solid first quarter, which was complemented by the acquisition of 38% of PTC, and the continued network build out in the Maldives," remarked Faisal Al Ayyar, Chairman of Wataniya Telecom. "These activities combined with the positive overall performance of the operations within the Wataniya group are in line with the company's expansion objectives of prudent investment in markets with a bright future. Algeria's economic recovery and expansion is positively affecting the cellular mobile market where market penetration has increased from 7% to more than 18% in the 7 months since our commercial launch. Iraq is experiencing a similar effect as the country rebuilds, where the GSM mobile penetration has grown to 7% from virtually nothing 15 months ago. I expect that by the end of this year, there will be more than 3 million total GSM customers in Iraq. Valuations of operations have risen significantly in the markets where we have invested, proving that our investment strategy was correct years ago.", Mr. Al Ayyar added.

Wataniya Telecom Group First Quarter Highlights:

• Revenues grew to KD 73.4 million (USD 250.0 million), an increase of 8% compared to last quarter revenues of KD 68.1 million (USD 232.0 million), and an increase of 41% compared to the same period in 2004.

• Total active customers increased to 3,241,741 compared to 2,652,802 from the last quarter, an increase of 22%.

• Consolidated earnings per share are 28 fils for Qtr 1 ended March 31, 2005.

Kuwait: Wataniya Telecom continued its program of investing in the latest network elements and deploying EDGE technology throughout Kuwait. Wataniya Telecom's customer base increased to 861,895 active customers. Revenues for the first quarter were KD 36.3 million (USD 123.7 million) compared to KD 35.1 million (USD 119.6 million) in the first quarter of 2004. EBITDA for the 1st quarter of 2005 was KD 16.3 million (USD 55.5 million), or a 45% EBITDA margin, compared to KD 16.0 million (USD 54.5 million), a 46% margin for the 1st quarter of 2004. Net profit for the 1st quarter of 2005 was KD 15.0 million (USD 51.1 million), an increase of 46% compared to KD 10.3 million (USD 35.1 million) for the 1st quarter of 2004.

Tunisia: Market demand in Tunisia for GSM mobile services expanded rapidly with the total mobile market reaching 40% penetration of which Tunisiana has reached 32% market share. Tunisiana achieved an active customer base of 1,278,047, an increase of 22% over the previous quarter. Revenues for the 1st quarter of 2005 were KD 19.6 million (USD 66.8 million), an increase of 54% from quarter 1 2004 or KD 12.7 million (USD 43.3 million). EBITDA was KD 6.5 million (USD 22.1 million), an increase of 38% as compared to KD 4.7 million (USD 16.0 million), for quarter 1 2004. The net attributable profit to Wataniya Telecom from Tunisiana in Q1 is KD 0.35 million (USD 1.2 million).

Iraq: Asia-Cell achieved an active customer base of 627,196, an increase of 33% over the previous quarter. Revenues for the 1st quarter of 2005 were KD 10.8 million (USD 36.8 million) compared to KD 4.5 million (USD 15.9 million) for the 1st quarter 2004. EBITDA was KD 7.5 million (USD 25.5 million), or 70% versus KD 2.4 million (USD 8.1 million in the 1st quarter 2004. The net attributable profit to Wataniya Telecom from Asia-Cell in Q1 is KD 0.9 million (USD 3.1 million).

Algeria: Wataniya Telecom Algerie, operating under the trade name "Nedjma", surpassed 474,000 customers, since its launch on the 25th of August, 2004. Nedjma has significantly ramped up its network deployment and now covers 50% of the Wilayas (states) in Algeria. Revenues for the 1st quarter of 2005 were KD 6.2 million (USD 21.1 million). EBITDA was KD (3.2) million (USD (10.9) million). The net attributable loss to Wataniya Telecom in Q1 is KD 3.7 million (USD 12.6 million).

The Company's share price as of March 31, 2005 was KD 1.940, giving a Kuwait Stock Market valuation for NMTC (Wataniya Telecom) of KD 846.6 million (USD 2.88 Billion). Consolidated earnings per share for the Q 1 year 2005 were 28 fils.