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21 February 2024

Omantel gains on royalty cut

By Agencies

Oman Telecommunications Co (Omantel) posted its second-biggest profit ever in the fourth quarter after a cut in government royalties boosted revenue. It also beat analysts' forecasts.

Net income in the three months to December 31 surged almost 47 per cent to OMR29.43 million (Dh281m), compared with OMR20.07 million in the year-earlier period.

"The main reason for the profit jump is an increase in revenue because the royalty cut had an impact," Menon Gopinath, head of planning and economics in Omantel's strategic finance department told Reuters. That added about OMR3 million to profit, Gopinath said.

The number of mobile phone users rose more than 18 per cent to 1.48 million in the year to December 31, Gopinath said. Revenue in 2007 rose 12.9 per cent to OMR365.3 million, Omantel said in a statement on the Omani bourse website.

"The economy is booming so this contributed to the rise in the number of subscribers," Gopinath said. Oman's economy probably grew 5.6 per cent last year, and may grow another 5.7 this year, according to a Reuters poll of economists.

Analysts' forecasts for Omantel's fourth-quarter profit ranged from OMR22.30 million to OMR26.39 million, in a Reuters survey last month, with the average of three analysts at OMR24.61 million.

In October, the government cut the royalties Omantel and rival Nawras pay on mobile phones to 7 per cent from 12 per cent and on fixed-line to 10 per cent.

The cut, which was retroactive to the start of the year, added OMR9.8 million to Omantel's third-quarter profit, making it a record.

Shares of Omantel, which were trading when the company released its results, closed up 2.43 per cent on Sunday. The shares were up 1.05 per cent at Thursday's close. (Reuters)