|25 July, 2019

Ooredoo Kuwait reports rise in Q2 profit

The company's shares rose 0.62 percent to 653 fils on Thursday but have dropped 8.54 percent so far since the start of the year 2019

A Kuwaiti investor keeps track of stock prices at the Kuwait Stock Market October 13,2008.

A Kuwaiti investor keeps track of stock prices at the Kuwait Stock Market October 13,2008.

REUTERS/Stephanie McGehee

Mobile operator Ooredoo Kuwait reported a 174.19 percent rise in year-on-year Q2 2019 net profit.

The company’s Q2 2019 net profit attributable to shareholders amounted to 8.5 million Kuwaiti dinars ($102.59 million) compared to 3.1 million dinars for Q2 2018.

Omar Maher, vice president of equity research at EFG Hermes told Zawya that Ooredoo Kuwait’s results came exactly in line with EFG Hermes’ estimates, “showing no surprise across most numbers.”

Ooredoo’s Q2 2019 total operating revenue dropped 6.41 percent to 156.1 million dinars, from 166.9 million dinars in Q2 2018.

“Revenues continued to shrink across the board on an annual basis, in line with our expectations, with the company citing a broad shift from traditional voice/SMS services towards data as a key reason for revenue decline; we see this as an indication that the company perhaps did not focus enough on the data segment,” Maher said.

The company’s shares rose 0.62 percent to 653 fils on Thursday but have dropped 8.54 percent so far since the start of the year 2019.

“Overall, we still have concerns on the operating health of certain subsidiaries (namely Algeria), mainly because of their challenging environments, but we believe this is more than priced in at the current levels,” Maher said.

“We have a ‘Buy’ rating on the stock, and our TP (Target Price) implies an upside of close to 53% from the current price. We believe Ooredoo Kuwait’s trading multiples are attractive, standing currently at a 2019e EV/EBITDA of 2.3x and a dividend yield of 7.7%,” he ended.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)

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© ZAWYA 2019

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