October 20, 2015 / 8:39 AM / 2 years ago

Weak tenge, rising competition cut Kazakh mobile firm KCell's profit

ALMATY, Oct 20 (Reuters) - Kazakhstan’s mobile phone operator KCell , controlled by Sweden-based TeliaSonera, its net profit dropped in January-September due to mounting competition and a sharp fall in the Kazakh tenge.

The London-listed company said its net profit fell by 13 percent in the first nine months of 2015 year-on-year to 39.67 billion tenge ($143 million), while revenue dropped by 8.8 percent to 128.8 billion tenge in the same period.

“Kcell’s performance in the third quarter was impacted not only by intensified competition, but also by a significant fall in the value of the tenge, which followed the government decision in August to allow a freely floating exchange rate,” KCell Chief Executive Officer Arti Ots said.

The oil-rich nation’s government and central bank allowed the tenge to float freely to achieve a more market-based rate after a plunge in world oil prices and the weakening of the currencies of Russia and China, Kazakhstan’s main trade partners.

Citing price competition in Kazakhstan, the biggest among the Central Asian markets Telia has said it wants to exit, the Nordic firm said on Tuesday it now expected 2015 core profit for the group slightly below the 2014 level on a like-for-like basis.

KCell’s earnings before interest, tax, depreciation and amortisation dropped by 19.9 percent in January-September to 64.7 billion tenge. ($1 = 277.10 tenge) (Reporting by Dmitry Solovyov, editing by Louise Heavens)

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