Palestinian fixed, mobile and data services provider Paltel has reported a 1.3% year-on-year decrease in net operating revenue to USD516.0 million in 2012, from USD522.7 million a year earlier. The group said the results reflect its stable performance in the country, despite the current economic downturn. The country continues to be adversely impacted by changes in local taxation laws, as well as through fluctuations in currency exchange rates and the overall slowdown in economic activities in the wider region. Pre-tax earning stood at USD149.0 million in FY12, compared with USD142.5 million in FY11, while net income reached USD115.8 million down from USD128.0 million previously. Paltel attributed the fall in profits to the government’s decision to postpone the investment encouragement 50% tax exemption for an additional two years. Adding to its woes, the tax was raised from 7.5% in FY2011 to 20% in FY2012 it said, as per a new tax law that was implemented the beginning of 2012.
Commenting on the results, Sabih Masri, chairman of the Paltel Group, said: ‘The consolidated net operating revenues and the net income do not solely reflect the performance indicators of the group. On the contrary, the group achieved significant growth in its customer base in both the fixed and mobile lines which also applies to ADSL subscribers … The economic crisis the government is currently facing, coupled with the current challenges in the economy in general and fluctuations of exchange rates, have affected the net income of the group in the year 2012. In spite of continued external challenges, the group maintains core investments in the telecom infrastructure in Palestine and foresees future opportunities in this promising sector.’
Adding to his comments, its chief executive Ammar Aker noted: ‘[Our] challenges are further exacerbated by additional Israeli obstacles towards the group’s efforts to obtain 3G and 4G frequencies which we perceive as an opportunity for future growth and more development in the telecom sector in Palestine. We are still hopeful to succeed in obtaining these frequencies in order to provide 3G and 4G services to our customers in the near future.’