MTN Group has unveiled its financial results for the six months ended 30 June 2010

Mergers, Acquisitions and Financial Results

South Africa-based MTN Group has unveiled its financial results for the six months ended 30 June 2010, announcing an 11.4% increase in aggregate users, to 129.2 million subscribers. MTN hailed the subscriber increase as a result of ‘a solid performance in all aspects of the business’. However, group revenue decreased by 2.2% to ZAR56.0 billion (USD7.7 billion) year-on-year, while earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by 1.1% to ZAR24.2 billion when compared to the same period one year earlier. MTN operates in three regions: South and East Africa, West and Central Africa and Middle East and North Africa. The South and East Africa unit was the only operation to report an increase in revenue for the period: ZAR20.56 billion up from ZAR19.40 billion one year earlier, an increase of 6.0%. By contrast, MTN’s West and Central African operation saw revenues decline from ZAR26.76 billion to ZAR24.72 billion year-on-year – a decrease of 7.6%. MTN’s Middle East and North Africa regional operation witnessed revenues decreasing from ZAR11.06 billion to ZAR10.66 billion for the same period, a decrease of 3.6%. The West and Central African operation reported having the largest subscriber share for the period ending 30 June 2010, with 59.36 million customers. In the Middle East and North Africa MTN reported 41.19 million subscribers, whilst the group’s South and East African operation controlled 28.66 million users as at 30 June. Group President and CEO Phuthuma Nhleko commented: ‘The MTN Group Limited delivered a sound operational performance for the six months ended 30 June 2010. This was the result of a solid performance in all aspects of the business, aided by high quality networks, robust and competitive distribution channels, attractive segmented product offerings and an increased focus on value added services’. * Orascom posts 2Q net loss on forex losses Egyptian telecoms group Orascom Telecom has revealed a net loss for the three-month period ended 30 June 2010 on the back of unrealised foreign exchange losses. In the second quarter of its 2010 fiscal year the company posted a net loss after minority interests of USD66.1 million, reporting that forex losses in the three-month period were USD120 million; by comparison, in the same period a year earlier Orascom posted a net profit of USD111.8 million. The Egyptian company also noted that impairment charges in Algeria and start-up losses attributed to its Canadian operations had both impacted on the bottom line. Revenues however fared better, with Orascom generating turnover of USD1.058 billion in 2Q10 compared with USD990.6 million a year earlier, a 7% year-on-year increase, although monthly average revenue per user (ARPU) continued to decline across all regions of operation. In the three-month period Orascom reported that global ARPU was USD5, down 16.7% y-o-y, with Lebanon-based Alfa ad Egyptian cellco MobiNil reporting the largest declines, of 25% and 22.9% respectively. In operational terms, Orascom saw subscriber growth at every one of its subsidiaries in the quarter, with the group’s total wireless customer base standing at 99.079 million at end-June 2010. Mobilink, Orascom’s Pakistani unit, remains its largest by subscribers, with the subsidiary adding just over 630,000 customers in the three months to 30 June 2010 to bring its total to 32.302 million. In its home country meanwhile MobiNil, which accounts for the second largest number of Orascom’s total customers, reported 26.147 million subscribers at the end of the first half of 2010, up just 0.1% y-o-y, with the slowing growth attributed to new regulations and the shortage of new numbers.