Orascom cites income tax increase as it reports a net loss in 2Q11

12 Aug 2011

Egyptian telecoms group Orascom Telecom Holding (OTH) posted a net loss in the three months ended 30 June 2011 as a result of increased income tax. For the quarter in question Orascom reported a net loss of EGP108.16 million (USD47.6 million) compared with a profit of EGP4.87 million in 2Q 2010, after a new Egyptian law boosted income tax rates from 20% to 25%, with the company noting that the higher levy meant that the gain realised from the sale of its Tunisian unit, Orascom Telecom Tunisiana, in January 2011 had been reduced by approximately USD58 million in 2Q11. Despite the loss in the second quarter, for the six months ended June 2011 Orascom still saw a sharp rise in net income, which surged from EGP12.12 million in 1H10 to EGP4.81 billion on the back of the sale of its 50% stake in Tunisiana for a total cash consideration of USD1.2 billion. Revenues for the first half of 2011 meanwhile stood at EGP11.54 billion, up from EGP10.44 billion a year earlier, while earnings before interest, tax, depreciation and amortisation (EBITDA) for the six-month period was EGP5.39 billion, representing an 11% year-on-year increase.

Operationally, at end-June 2011 Orascom’s total subscriber base had risen to more than 105 million, up almost 13% against the same date a year earlier. Pakistan’s Mobilink remains the group’s largest unit in terms of subscribers, counting a customer base of 33.38 million at the end of the period, up from 32.20 million at end-June 2010, while Bangladesh-based Banglalink reported the highest percentage growth, increasing subscriber numbers by 25.5% to 20.20 million in the year to June 2011.

Egypt, Global Telecom Holding (GTH, formerly OTH)