Investors bought up shares of Qatar Telecom yesterday after first-quarter net profit exceeded analyst estimates amid expectations of an initial public offering for the company's Iraq business.
Profit in the first three months reached 711.4 million riyals for the mobile operator, based in Doha, beating the 644m-riyal consensus of analysts. The company, also known as Qtel, made 810.8m of net income in the same period last year.
"Qtel continues to deliver solid numbers and perform ahead of expectations," said Tariq Qaqish, the deputy head of asset management at Al Mal Capital in Dubai.
"The Iraqi market carry on is one of the major contributors for the company's margin improvement. We expect the stock to catch investors' attraction on the possible initial public offering of Iraq assets."
Qtel rose for a third day, up 1.5 per cent to trade at 140.10 riyals on the Qatar Exchange. The stock rose 2.3 per cent on Sunday and 4.5 per cent last Thursday. Qtel has risen 27 per cent so far this year.
The company appointed BNY Mellon last year to advise on attracting international buyers as it prepares for an IPO on the Iraq Stock Exchange. This would be the first foreign share listing in the country's recent history. Qtel's revenue grew 7.6 per cent to 8 billion riyals as the company's customer base grew to 84.4 million. Qtel's 19 per cent decline in profit is linked to foreign-exchange losses in Indonesia, the company said.
In Indonesia, where Qtel owns a majority stake in Indosat Tbk, the rupiah traded at 9,146 to the US dollar on March 30 compared with 8,720 a year earlier, according to data compiled by Bloomberg.
Qtel seeks to expand overseas amid increased competition in its home market from Vodafone Qatar.
The company, which owns stakes in telecommunications companies from North Africa to South East Asia, held talks to buy a 19 per cent stake in its Iraqi unit Asiacell from Merchant Bridge, the chairman, Abdullah bin Mohammed Al Thani, said in January.
* with Bloomberg News