Orascom reveals net loss in 4Q 2009

16 Mar 2010

Egyptian telecoms group Orascom Telecom has posted a net loss of USD46.4 million for the three months ended 31 December 2009, compared to a profit of USD180.9 million in the same quarter a year earlier, with the company citing civil disturbances in Algeria as one of the main reasons behind the decline. Orascom claims that its Algerian subsidiary Djezzy was significantly affected by rioting that followed a World Cup qualifier between Algeria and Egypt; according to the company, as a result of the violence it lost approximately USD55 million as a result of lower revenues, stock damage and tax provision, and a further USD41 million related to property damage.

One other notable financial outlay in the last fiscal quarter of 2009 relating to Djezzy was the USD110 million that Orascom paid in order to allow it to appeal an Algerian tax bill, which claimed the company owes USD597 million for the period 2005-2007; the Egyptian company has argued that it was tax exempt during the dates in question. The appeals process is expected to last for at least another twelve months.

Orascom reported consolidated group revenue for the final fiscal quarter of the year of USD1.296 billion, a decline of 0.7% year-on-year, with Djezzy accounting for 34.5% of the total, or USD447.5 million. Revenue from the Algerian unit also fell compared to the previous year, down 12.1% against the USD508.9 million it generated in the last three months of 2008. Consolidated group earnings before interest, tax, depreciation and amortisation (EBITDA) meanwhile fell 18.9% y-o-y to USD495.9 million in the three-month period.

As at end-December 2009 Orascom’s total subscriber base was 92.9 million, up 19% against the 78 million it had a year earlier. Mobilink, the company’s Pakistani subsidiary, remains the largest unit by subscribers, with 30.8 million at the end of the year, while Egyptian Company for Mobile Services (MobiNil) had 25.4 million.