Net profit slumps for OTH in 3Q11 after significant gains in year-ago period

14 Nov 2011

Egypt’s Orascom Telecom Holding (OTH) has unveiled its financial results for the three months ended 30 September 2011, with the company attributing a slump in net income for the period to gains made in the same quarter of 2010 related to restated shareholder’s agreements with fellow MobiNil shareholder France Telecom. For the third quarter of the 2011 fiscal year OTH posted a net income before minority interests of USD10 million, compared to USD934 million in 3Q11, while the company actually slipped to a net loss of USD975,000 in terms of net income attributable to equity holders; in 3Q10 OTH’s net profit included USD822 million related to the recognition of the fair value of its investments in MobiNil and the cellco’s parent company Egyptian Company for Mobile Services. OTH also pointed to the appreciation of the Egyptian pound against the Canadian dollar in 3Q 2011 – which it said resulted in an ‘unrealised foreign exchange loss attributable to the intercompany loan towards Wind Mobile in Canada’ – as another contributory factor to the net loss.

OTH’s consolidated revenues for the three-month period meanwhile stood at USD1.01 billion, up 3.4% year-on-year, driven by a 9.3% annual increase in turnover from the group’s GSM-based services to USD960.3 million. Algerian unit Djezzy remained the group’s largest revenue contributor, accounting for just over half, or USD486.7 million, of total GSM revenues, representing a 9.5% y-o-y increase in the subsidiary’s sales against 3Q10. North Korea’s Koryolink meanwhile registered the largest percentage increase in turnover, seeing sales rise by 125% y-o-y to USD41.5 million. Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter reached USD480.9 million, up 21.1% against the USD397.1 million recorded in the third quarter of 2010, which OTH said demonstrated ‘a solid performance across most of [its] GSM subsidiaries.’

In operational terms, at the end of September 2011 OTH’s total subscriber base (including operations accounted for under the equity method and management contracts) stood at 108.94 million, up 12.0% against the 97.25 million customers it had a year earlier. Pakistan’s Mobilink remained the group’s largest subsidiary in terms of subscribers, with 33.42 million customers on its books at end-September 2011, up 6.3% year-on-year, while Banglalink in Bangladesh saw the largest number of new subscribers signed up, with the cellco adding some 4.03 million customers over the year to reach 22.14 million in total. Also notable, both Koryolink and Wind Canada saw 150%-plus increases in their respective customer bases.

Egypt, Global Telecom Holding (GTH, formerly OTH)