Business Reporter -
MUSCAT, FEB 24 -
The board of directors of Oman Telecommunications Company SAOG (Omantel approved the audited results of the Company for year 2017. Omantel recorded an increase of 44.7 per cent in revenue reaching RO 751.7 million compared to RO 519.4 million in 2016.
The Company’s net profit reached RO 106.8 million (RO 79.7 after adjusting non-controlling interests) compared to RO 115.8 in 2016. These results include Zain Group results for the period from November 15 to December 31, 2017 following the acquisition of a strategic share of 21.9 per cent in Zain Group.
During 2017, Omantel has been able to grow the revenue from its domestic operations by 2.4 per cent despite the challenging environment in the Sultanate resulting from the increase in royalty from 7 per cent to 12 per cent and the increase of income corporate tax from 12 per cent to 15 per cent. The impact of the royalty change amounted to RO 17.6 million in 2017. The acquisition of a strategic share in Zain Group has enabled Omantel to grow its group revenue by 44.7 per cent in addition to enhancing the net profit.
Commenting on these results, Chief Executive of Omantel Talal al Mamari said: “The business environment has been very challenging with lower economic growth as a result of decline in oil prices and changing enterprise and consumer behaviour. Moreover, last year witnessed the increase in royalty and income corporate tax charges which had a clear impact on our net profit compared to 2016.”
“We continued the implementation of our corporate strategy “Omantel 3.0” aiming to diversify Omantel revenue and strengthening its position in the market. We have successfully acquired a 21.9 per cent strategic share in Zain Group which resulted in the creation of the third telecom alliance in the region with more than 50 million customers and operation in 10 different markets in the Middle East. Apart from the contribution of this acquisition in enhancing Omantel revenue and net profit, there are a lot of growth and business improvement opportunities for both operators especially in areas of wholesale and procurement in addition to improving the customers’ experience”.
Omantel Board proposed to the Company’s AGM a final dividend distribution of 50 per cent (50 baisa per share) to shareholders.
This is in addition to the interim dividend of 20 per cent (20 baisa per share) paid to shareholders in August 2017.
Accordingly, the total aggregated distribution amounts to 70 per cent of the company paid up capital.
The Board also decided to invite the Company’s shareholders to an Extra-ordinary General Meeting to be held along with the Annual General Meeting to discuss and approve issuing a guarantee for the issuance of a US-denominated bond not exceeding US $2 billion in the international capital markets by a subsidiary of Omantel.
The proceeds of these bonds will be used to replace the abridged loan facilities obtained by Omantel to acquire a controlling stake in Zain Group.
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