Vietnam’s Viettel African divisions net $116mn in losses for 2015: report
Vietnam’s Viettel African divisions net $116mn in losses for 2015: report
The African sector of Vietnamese telecom giant Viettel was hit by over US$115 million in losses last year due to rising financial expenses and exchange losses, according to the military-run company’s latest financial report.
Viettel operates in nine overseas markets in Southeast Asia, Latin America, and Africa through its international arm, Viettel Global.
In 2015 Viettel Global posted nearly VND14.9 trillion ($665.18 million) in revenue, Dau Tu (Investment) newspaper said, citing the company’s financial report.
The company’s 2015 post-tax profit dropped to VND500 billion ($22.32 million), the lowest since 2012, while its profit reached VND2.3 trillion ($102.68 million) only a year earlier.
In Africa, Viettel’s subsidiaries in Mozambique, Cameroon, Tanzania, and Burundi collectively posted a revenue of VND4.9 trillion ($218.75 million), up 25 percent from 2014. Despite the rise, the company incurred nearly VND2.6 trillion ($116.07 million) in losses, almost triple the 2014 figure, according to the report.
Viettel Global’s revenue in Southeast Asia, through units in Laos, Cambodia, and Timor Leste, also saw a decline, although not to the same extent.
The company posted a decrease in revenue of nine percent year on year to VND6.18 trillion ($275.89 million). The post-tax profit in the market slumped 28 percent from a year earlier to VND1.23 trillion ($54.91 million).
Latin America is the only outbound market where Viettel operated with a gain in 2015. The businesses in Haiti and Peru contributed VND213 billion ($9.51 million) in earnings to Viettel Global, up from a VND87 billion ($3.88 million) loss in 2014.
According to Dau Tu, Viettel Global attributes its losses in Africa to exchange losses caused by volatile forex markets in the region.
Domestic currencies in the African countries in which Viettel operates lost ground against the U.S. dollar in 2015, the company explained in its report.
The company said, however, that the losses are normal, stating that it usually takes telecom firms three to seven years before they reach profitability in new markets. Viettel Global expanded to Burundi and Tanzania last year, thus losses are expected.
Viettel, Vietnam’s leading mobile carrier, is also poised to enter a tenth overseas market, as the company announced last week it will invest a combined $1.5 billion to begin operating in Myanmar.
Myanmar has only granted four telecom licenses, one of them to Viettel, according to an announcement on its website.
The Vietnamese company is required to form a consortium with two local companies in order to join Myanmar’s telecom market.
Myanmar National Telecom Holding Public Limited, consisting of 11 local companies and state-owned Star High Public Co. Ltd., are expected to be Viettel’s partners in the consortium, according to the Vietnamese firm.
