Mauritius Telecom posts drop in 2009 net income on higher taxes

Mergers, Acquisitions and Financial Results
Mauritius Telecom (MT) said its net profits in FY2009 dropped 23.8% to MUR1.40 billion (USD42.17 million), compared to the previous year, largely the result of the introduction of new special taxes and a drop in tourism. Reuters quotes its chief executive officer Sarat Lallah as saying: ‘The fall in profits is due to the introduction of a solidarity levy of 1.5% on turnover and 5% on profits of telecom operators … The government also introduced in 2009 a corporate social responsibility tax of 2% on profits. These taxes have resulted in a shortfall of MUR410 million.’ The financial results were further impacted by a dramatic drop in tourism on the island following the global financial crisis. The CEO noted that service revenue from international roaming fell by 13% as less people visited the country. MT is the dominant fixed line and mobile provider on the island and a leading ISP. It hopes to list on the nation’s stock exchange in the near future. On a positive note, MT reported that turnover increased to MUR7.1 billion from MUR6.8 billion in 2008, while pre-tax profits increased 4% year-on-year to MUR2.09 billion. Lallah attributed the growth in part to a strong performance from its mobile division. The mobile market expanded 6.7% last year, he said, contributing strongly to the group’s overall results. Mauritius is home to around one million mobile subscribers of which 640,000 are signed up to Orange, a unit of MT