Wednesday, May 27, 2009

Orascom Q1 Profits Down 66% On Account of Forex Losses of $62m

Orascom Telecom reported a 66 percent drop in first-quarter net profit to USD 72 million, hurt by unrealised foreign exchange losses of USD 62 million. The company, which has operations in seven countries, posted a 4 percent decrease in revenues to USD 1.19 billion, while EBITDA fell 9 percent to USD 526 million.
Both figures were impacted by the drop in local currencies versus the dollar. OT said its total subscriber base rose to 80.37 million by the end of March, from 78.00 million for end-December and 74.05 million in March 2008, while blended ARPU dipped to USD 5.80 from USD 6.3 in the December quarter and USD 6.60 a year earlier. The company's CEO Naguib Sawiris said in a statement that the first quarter confirmed the company's expectation that economic growth would slow further, leading to a more challenging operating environment.
As a result the group has started a programme to reduce operating costs across its operations by 7-9 percent in local currency this year. OT's Algerian operation, Djezzy, performed below expectations, and Pakistan's growth was hurt by political and economic turmoil, while Tunisia and Bangladesh performed well in the first quarter and Egypt was continuing to display solid market growth.
Sawaris said the company is evaluating various strategic initiatives to further enhance shareholder value, including a potential IPO for the Algerian and Tunisian operations, consolidation on the Bangladesh market and tower and network sharing in Pakistan.

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