Orascom Egypt reports 66% plunge in net profit resulting from foreign exchange devaluation
Egyptian telecoms group Orascom Telecom has reported its fiscal results for the three-month period ended 31 March 2008, revealing a steeper than expected decline in net profit. Orascom posted a 66% drop in net profit for the first quarter, down to USD72 million from USD210 million a year earlier. The operator said that currency devaluation against the US dollar was a major factor in the drop, noting that it been impacted by unrealised foreign exchange losses of approximately USD62 million in the quarter. Net revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) for the period were also down to USD1.197 billion and USD526 million respectively, drops of 4% and 9% compared to end-March 2008; again Orascom said both drops were a direct result of foreign exchange fluctuations.
Orascom singled out Algeria’s Djezzy as one of the group’s weaker performing subsidiaries, noting results were below expectations as a result of a slower approval process for promotions by the local regulator. It also said that its Pakistan-based operations were feeling the impact of both political and economic turmoil. Commenting on the results Naguib Sawiris, Orascom chairman and CEO, said: ‘The first quarter of 2009 confirmed our expectation that economic growth would slow further leading to a more challenging operating environment.’
The group also reported that at the end of March 2009 it had a total of 80.37 million subscribers across all of its units, up 9% against the previous year. Egypt’s MobiNil and Banglalink in Bangladesh led the way, adding 3.95 million and 2.02 million subscribers respectively, and helping to offset a decline of 3.29 million at Mobilink Pakistan.