Lower revenues, higher ad costs prompt net income slump for MobiNil in 3Q10

Mergers, Acquisitions and Financial Results
Egyptian cellco MobiNil has released its financial results for the three months ended 30 September 2010, revealing a 41% plunge in net profit, which the operator attributed to lower service revenues and higher costs related to advertising during the month of Ramadan. In its third fiscal quarter MobiNil posted turnover related to mobile services of EGP2.707 billion (USD467 million), down 3.1% year-on-year, and while takings from connection fees, handsets and roaming all grew against the same period a year earlier, service revenue, which accounts for the bulk of the company’s turnover, fell by 4.7% to EGP2.501 billion. Net income from mobile services stood at EGP289 million for the three-month period, down 41.2% from EGP491 million a year earlier. Despite the declines, MobiNil CEO Hassan Kabbani did note that the quarter had seen ‘a slowdown in the rate by which revenues are declining despite the seasonal affect of Ramadan.’ Meanwhile, including financial results from the company’s fixed line operations – MobiNil finalised the acquisition of local ISP LINKdotNET and has begun consolidating its results – total company revenues for the quarter were EGP2.74 billion, representing a 2% y-o-y drop, while consolidated net income was EGP280 million, down 42.9% against 3Q 2009. Earnings before interest, taxation, depreciation and amortisation (EBITDA) for the operator were down 14.1% at EGP1.083 billion. At the end of September 2010 MobiNil reported that its mobile subscriber base had risen to 28.4 million, up from 24.6 million a year earlier.