Tag Archives: business

Kcell’s Q3 revenue drops 13.6% in Kazakhstan

ALMATY, OCT. 21 2016 (The Conway Bulletin) — Kcell, Kazakhstan’s largest telecoms operator, posted a 13.6% drop in revenues for Q3 compared to the same period in 2015, blaming it on tough economic conditions.

Arti Ots, Kcell’s CEO, said, though, that the Kazakh economy now appears to show signs of a timid recovery.

“Kazakhstan has started to see some encouraging signs of macro recovery, with an increase in oil prices. There have also been some signals that consumer price inflation is easing and currency levels are stabilising,” Mr Ots said in a statement.

Kcell’s quarterly revenues, which stood at 36.9b tenge ($111m), were up compared to Q2 but still lower than 2015. The tenge lost 50% of its value in the second half of 2015, destroying people’s confidence in the economy.

Still, Kazakhstan’s competitive telecoms market remains tough.

“We delivered a second successive quarterly increase in service revenue and reported net growth in our subscriber base, although the economic and market environment remained challenging and we saw further year- on-year declines in revenue and profit,” Mr Ots said.

Fierce competition and price cutting have characterised Kazakhstan’s telecoms market recently.

Kcell’s subscribers grew by 1% from January to 9.9m, still below the near 11m that the company had serviced, and expenditure per subscriber declined. In Q3, the average user spent less than 1,200 tenge ($3.6) per month, down 2.7% from last year.

Sweden’s Telia Company owns a 62% stake in Kcell. It wants to sell off its assets in Central Asia after a corruption scandal involving its unit in neighbouring Uzbekistan.

ENDS

(News report from Issue No. 302, published on Oct. 28 2016)

InfiNet to launch WiFi in Kazakh trains

OCT. 27 2016 (The Conway Bulletin) — Malta-based Russian telecoms service company InfiNet Wireless said it agreed a deal with Kazakhstan Temir Zholy, the national railway operator, to launch an onboard wireless service in Kazakhstan. InfiNet has already launched a pilot project on the segment between Astana and Borovoye, in the north of the country.

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(News report from Issue No. 302, published on Oct. 28 2016)

Tajik banking system weakens

OCT. 21 2016 (The Conway Bulletin) — On a visit to Dushanbe, Juha Kahkonen, the IMF’s deputy head for the Middle East and Central Asia, said that banks’ lending practises had gotten very slack, creating major structural economic problems during the recent downturn. He also said that around half of Tajik banks’ loans were now considered non-performing. Two high street banks in Tajikistan have been placed under Central Bank administration.

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(News report from Issue No. 302, published on Oct. 28 2016)

Oil’s Fiscal Breakeven Points

OCT. 28 2016 (The Conway Bulletin) — Hiding behind timid smiles, officials from Central Asia and the South Caucasus oil and gas producing countries continue to say that the worst may be over for the region’s economic slump.

In the medium term, Kazakhstan will constantly boast about the restart of the giant Kashagan offshore project and Azerbaijan will try everything it can to attract investments for the Southern Gas Corridor, the pipeline network that will pump gas from the Caspian Sea to Europe.

Production, however, will continue to disappoint. Output will be flat in Kazakhstan, given a lift by Kashagan finally coming back on-stream after a three year delay, and decline in Azerbaijan.

Both countries have, on different occasions, praised the decision by OPEC, the oil producers’ lobby group, to freeze production to help push prices up again.

But behind the propaganda, lies a problem, which the IMF highlighted in its latest report: these countries will face higher fiscal breakeven oil prices in the next few years, piling pressure on their economies.

In April, the IMF said that the breakeven prices that Azerbaijan, Kazakhstan and Turkmenistan would need to balance their government budgets in 2016 were $47, $88 and $42.7/barrel respectively.

In a report this week, the IMF said breakeven prices for Azerbaijan and Turkmenistan had grown to $71 and $50.4/barrel respectively.

For 2016, oil prices are unlikely to average above $50/barrel, which means that the three major energy exporters in the region will have to use their reserves to prop up their economies. Officials may be happier now than in January budget issues are far from sorted.

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(News report from Issue No. 302, published on Oct. 28 2016)

EITI tells Azerbaijan that civil society must be improved

ALMATY, OCT. 26 2016 (The Conway Bulletin) — The Extractive Industry Transparency Initiative (EITI), a global lobby group which effectively acts as an ethical watchdog for countries with economies that rely heavily on mining, oil and gas, said it will expel Azerbaijan from the organisation if it fails to reform its NGO laws within four months.

The Oslo-based EITI is influential because Western investment is often linked to compliance with its various rules. If Azerbaijan was kicked out of the group, it would threaten vital foreign investment deals.

Last year, the EITI downgraded Azerbaijan’s membership because of what it said was a crackdown on civil society.

At a meeting in Kazakhstan, the EITI said that Azerbaijan had improved some aspects of its economy and society, in line with recommendations drawn up last year during a so-called Validation process, but that more needed to be done to retain its membership.

“Azerbaijan has made important progress in opening up the oil sector and I am encouraged to hear about the recent plans for government reforms towards more transparency,” Fredrik Reinfeldt, chair of the EITI, said in a statement.

“I hope that the government will continue its recent efforts to ensure that civil society can play its proper role in this process, otherwise this progress risks being overshadowed.”

If Azerbaijan fails to keep its EITI membership, investment for its Southern Gas Corridor, a pipeline network that will pump gas from the Caspian Sea to Europe, will be at risk.

Specifically, in September the EBRD said it would reconsider a $1.5b loan for the TANAP pipeline, part of the Southern Gas Corridor that Azerbaijan is building to pump gas from the Caspian Sea to Turkey, if Azerbaijan was kicked out of the EITI.

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(News report from Issue No. 302, published on Oct. 28 2016)

Azerbaijani miner jumps

OCT. 25 2016 (The Conway Bulletin) — Rallying on last week’s new discovery, Anglo Asian’s stock price nearly doubled, closing at 29p, a three-year high. On Oct. 17, the Azerbaijani miner said it discovered a new gold deposit 3km north of its main deposit at Gadabek. The company will further evaluate the deposit next year, when it plans to bring it to commercial production.

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(News report from Issue No. 302, published on Oct. 28 2016)

Turkmenistan introduces new banking law

OCT. 25 2016 (The Conway Bulletin) — Looking to reassure nervous savers that the Turkmen banking sector was safe, Turkmenistan has introduced a new law which forces banks to guarantee saving deposits. Poor regional economic conditions have hit Turkmenistan hard with reports leaking out of the country of shortages and of the government running out of cash to pay its thousands of workers.

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(News report from Issue No. 302, published on Oct. 28 2016)

Japan’s Mitsubishi to build new thermal power station in Uzbekistan

OCT. 24 2016 (The Conway Bulletin) — Japan’s Mitsubishi Corporation signed a contract with state-owned Uzbekenergo for the construction of a second co-generation station at the Navoi thermal power plant which will significantly increase the plant’s capacity.

Navoi, in central Uzbekistan, is one of the country’s main industrial hubs.

Mitsubishi had participated in the construction of a 478 megawatt co- generation station that the Uzbek government commissioned in 2009.

Electricity generation is a major issue in the region with governments scrambling to replace aging Soviet- era technology.

Mitsubishi will work together with Turkey’s Calik Enerji. The two companies said construction of the new, 450 megawatt station will be completed by 2019.

Mitsubishi and Uzbekenergo had agreed on the feasibility of the new station in 2014. Like several other major infrastructure projects, the expansion of Navoi had been questioned due to the regional economic slump.

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(News report from Issue No. 302, published on Oct. 28 2016)

Kazakh businessman buys Turkish companies

OCT. 24 2016 (The Conway Bulletin) — Nurlan Saurambayev, CEO of SAT & Co, a Kazakh industrial conglomerate, bought two of the company’s Turkish subsidiaries, SAT&Co Holding A.S. and SAT&Co Madencilik A.S. for an undisclosed amount. Powerful businessman Kenes Rakishev owns 77.7% in SAT & Co. Mr Rakishev had increased his stake in late 2015, after forcing former CEO Rollan Mussinov to step down. Mr Saurambayev was appointed CEO in October 2015.

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(News report from Issue No. 302, published on Oct. 28 2016)

Gazprom Armenia appoints new CEO

OCT. 24 2016 (The Conway Bulletin) — Gazprom Armenia, a subsidiary of Russia’s gas giant Gazprom, appointed former deputy director Hrant Tadevosyan as its new CEO. Gazprom’s CEO Alexei Miller formally introduced Mr Tadevosyan during a visit to Yerevan. His predecessor, Vardan Harutyunyan, was appointed to head the state revenues committee earlier in October.

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(News report from Issue No. 302, published on Oct. 28 2016)