Orascom’s Algerian unit drags down third quarter performance

8 Nov 2010

Egyptian telecoms group Orascom Telecom has unveiled its financial results for the three months ended 30 September 2010, revealing a return to profit. Orascom posted a 1.6% year-on-year increase in revenues, which it attributed to strong growth across nearly all of its regions of operation. However, the group highlighted continued issues at its Algerian unit, Djezzy, where it said that government restrictions were prompting the loss of both subscribers and market share; in 3Q 2010 Djezzy reported a customer base of 14.9 million, up 1.3% y-o-y, but down 1.5% against the 15.1 million it had at end-June 2010. Group revenue stood at USD3.12 billion in the third quarter of 2010, up from USD3.07 billion, with all of the group’s units reporting revenue growth except Djezzy. The Algerian unit, which remains Orascom’s largest contributor to group turnover, saw revenues tumble 8.9% against 3Q09, which it said was primarily the result of a ban on advertising on government-owned TV channels. Group earnings before interest, tax, depreciation and amortisation (EBTIDA) meanwhile fell by 0.8% against the same period a year earlier to USD1.33 billion, with Djezzy once again responsible, having reported a 13.2% decline in EBITDA for the three-month period. Orascom posted a net profit of USD934 million in its third fiscal quarter of 2010, following a one-off gain involving its jointly-owned Egyptian operator MobiNil; net profit from continuing operations was USD112 million, up from a loss of USD108 million in the previous quarter.

At the end of September 2010 Orascom’s total subscriber base stood at 103.32 million, with Telecel Globe almost doubling its customer numbers against end-September 2009 to 2.95 million, while Bangladesh-based Banglalink saw an almost 50% increase in subscriber numbers to 18.1 million. Pakistan’s Mobilink remains the group’s largest operator in terms of customers, with 31.4 million at end-September 2010, and while this was a 4.7% y-o-y increase, it was 2.4% lower than the previous quarter; Orascom however said that the quarter-on-quarter drop was attributable to a clean-up of the subscriber base.