Algeria’ Djezzy GSM reports 2.6% growth in revenues to DZD36.7bn

Mergers, Acquisitions and Financial Results

 Algeria’s leading cellco Djezzy GSM has posted its financial results for the second quarter of 2013 ended 30 June, reporting 2.6% growth year-on-year in revenues to DZD36.7 billion (USD464.157 million) from DZD35.8 billion. The growth was attributed to higher voice revenues, following changes made to the marketing campaigns of existing offers. Djezzy’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased to DZD22.1 billion, a 2.5% improvement on the DZD21.5 billion reported in 2Q12. In the quarter under review, the company also reported a surge in its capital expenditures (CAPEX) of 69.9% to USD17.420 million, from USD10.256 million posted by 30 June 2012.

In operational terms, Djezzy GSM reported a total of 16.83 million subscribers by end-June 2013, marginally down by 1.1% from the 17.01 million reported in 2Q12; the negative result was attributed to ‘an ongoing ban and regulatory constraints that limited [the company’s] ability to compete effectively’. The company also estimated that ‘the inability to carry out maintenance and expansion works and to secure essential goods and services for the network continues to represent a key source of high operational uncertainty for the months to come.’

In July 2013 Djezzy GSM, majority owned by Egypt-based Orascom Telecom Holding (OTH), admitted to overstating its customer database with nearly 1.4 million subscriptions due to a glitch in its IT system. According to the company’s financial results for the first quarter of 2013, the customer database attributed to Djezzy totalled 17.93 million at the end of March 2013, although the actual number of subscribers should have been around 16.6 million. The glitch did not affect the company’s historical reported revenues or EBITDA, although it positively affected the blended average revenue per user (APRU), which increased by 4.98% y-o-y to DZD727 by end-June 2013 and minutes of use per user (MOU), which increased to DZD278 from DZD277 over the same period.