Qtel nine month net profit attributable to Qtel shareholders grows 12.6% to QR2.4bn

Financial Highlights:

• Earnings per share in 9M 2012 stood at QR8.34 (9m 2011: QR8.17). Earnings per share for 2011 have been restated as a result of the issuance of 30% bonus shares and 40% rights issue in 1H 2012.

Operational Highlights:

• Group revenue growth of 6.1%, supported by solid performances in Qatar, Iraq, Algeria and Palestine during the first nine months of the year and a stable performance by Indosat.

• Competitive environment and the ongoing shift from traditional voice and text to data usage are negatively impacting results in Oman and Kuwait.

• The Group is continuing its investments in new and leading technologies with the launch of 3G service in Tunisia and the launch of a trial phase for 4G LTE in Qatar.

• One-off positive impact on Net Profit Attributable to Qtel Shareholders in Q3 due to the completion of the Indosat Tower transaction.

• The Group's $3.0bn syndicated term loan was retired in August.

• Post-period end,and pending final regulatory approval in Kuwait, Qtel increased its shareholding in its subsidiary National Mobile Telecommunications Company (Wataniya Telecom) to 92.1%, in line with the Group's strategy to increase its investment in its own businesses where this is attractive in the long term.

As of 30 September 2012 the Group's consolidated customer base stood at 89.2m (9M 2011: 82.4m), representing an 8.2% year-on-year increase in total customer numbers. Group revenue for 9M 2012 demonstrated continued growth at QR25.0bn (9M 2011: QR 23.6bn).Group EBITDA for the period stood at QR11.7bn (9M 2011: QR10.9bn) with an EBITDA margin of 47% achieved (9M 2011: 46%). Net profit attributable to Qtel shareholders in 9M 2012 stood at QR2.4bn (9M 2011: QR2.1bn).
 
Commenting on the results, His Excellency Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani, Chairman of the Qtel Group said:

"The results announced today confirm that the Group's strategy and management is delivering financial performance that keeps us on a positive trajectory. As further evidence of this, we have taken steps during the period to increase our stake in Wataniya Telecom and look forward to building on our achievements in the period and delivering a successful outcome to the year as a whole."

Also commenting on the results Dr. Nasser Marafih, Chief Executive Officer of the Qtel Group said:

"The performances in Qatar, Iraq, Algeria and Palestine are very impressive and were key to helping us deliver robust revenue and EBITDA growth during these first nine months of the year. We view technology and service leadership as a strategic differentiator in key markets, demonstrated in the most recent quarter by our successful 3G launch in Tunisia and the launch of a trial phase for 4G services in Qatar. We will continue to combine this spirit of innovation with sound competitive propositions across our portfolio as we move through the remaining months of this year."

Review of Operations

The Group's operational performance can be summarized as follows:

Qtel - Qatar

Qtel continued to strengthen its position in a competitive and dynamic marketplace, ending the period with 2.5m customers (9M 2011: 2.4m).

Revenue increased by 9.4% year-on-year to stand at QR4.6bn (9M2011: QR4.2bn). EBITDA performance showed an increase of 9.6% year-on-year to QR2.5bn (9M 2011: QR2.2bn).

Qtel enhanced its portfolio of products and services in the quarter, launching the trial phase of its 4G LTE service, in preparation for the commercial launch at the end of 2012. The company also revamped roaming and mobile money services.

Indosat - Indonesia

Indosat continued to make positive progress in the most recent quarter, building upon the good momentum already demonstrated in the first half of 2012. Efforts to target the most valuable customer segments, combined with a focus on retention have helped to drive this progress. The period also saw the completion of the previously announced tower transaction. Indosat's subscriber base at 30 September 2012 stood at 55.7m (9M 2011: 51.8m), representing a 7.4% increase year-on-year in subscriber numbers. Revenue performance has also remained steady during the period, with revenue for 9M 2012 standing at QR6.4bn (9M 2011: QR6.4bn).

Depreciation during the year of the Indonesian Rupiah has impacted profitability however the business continues to grow with EBITDA at the end of the period standing at QR3.2bn: a 2.8% increase year-on-year (9M 2011: QR3.1bn).

Wataniya Telecom

Wataniya Telecom ('National Mobile Telecommunications Company K. S. C.') encompasses the Qtel Group's businesses in Kuwait, Tunisia, Algeria, Kingdom of Saudi Arabia, the Maldives and Palestine.

Algeria and Palestine have performed well in the quarter, with strong customer and revenue growth delivered across each of these markets. A major new development for Tunisiana was the launch of 3G service in the period which will see the service rolled out across the Tunisiana network over the next few quarters.

Wataniya has continued to experience increased competition in Kuwait. As a result, Wataniya's financial performance during the period at a group level was impacted. Wataniya's consolidated customer base remains strong at 18.8m (9M 2011: 17.4m). Consolidated revenue in 9M 2012 was QR7.3bn (9M 2011: QR7.2bn) and EBITDA in 9M 2012 was QR3.0bn (9M 2011: QR3.1bn).

Nawras - Oman

The Oman market remains highly competitive which has had a bearing on performance. Nawras closed the period with a customer base of 2.1m (9M 2011: 1.9m). Revenue for the period is down slightly at QR1.40bn (9M 2011: QR1.44bn), delivering an EBITDA performance in 9M 2012 of QR653.5m (9M 2011: QR726.1m).

Asiacell - Iraq

The Qtel Group currently has a 53.9% stake in Asiacell with plans to further increase its shareholding to 60% subject to Iraqi Government and Regulatory Authority approval.

During 9M 2012 Asiacell continued to demonstrate the strong growth and subscriber momentum seen in prior consecutive quarters.In 9M 2012 Asiacell's customer base grew by 12.6% to 9.8m (9M 2011: 8.7m). This growth has translated into a positive year-on-year revenue growth performance, with Asiacell revenue advancing 16.4% in 9M 2012 to QR5.0bn (9M 2011: QR4.3bn) while EBITDA increased by 20.2% to QR2.7bn (9M 2011: QR2.3bn).