Orascom Atributes Q3 Loss to Forex

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.

Zain Q1 Results Excludes Details of Africa Operations

MTN Revenues Up 9.2% As Profits Fall

South African mobile group MTN has posted net profit of ZAR14.65 billion (USD1.97 billion) for the full year ended 31 December 2009, down from ZAR15.32 billion a year earlier. CEO Phuthuma Nhleko said: ‘Movements in exchange rates in the year, mainly in the South African rand and Nigerian naira, had a substantially negative impact on the group's financial results.’

Meanwhile group revenues jumped 9.2% year-on-year as sales earned the company over ZAR111.95 billion in the twelve-month period, compared to ZAR102.53 billion in 2008.

Earnings before interest, tax, depreciation and amortisation (EBITDA) climbed form ZAR43.16 billion in the year ended 31 December 2008 to ZAR46.06 billion a year later. The company ended the year with 116 million mobile customers across its footprint, up from 90.65 million at the end of 2008.

The company expects growth to continue into 2010, forecasting 20 million net new additions by year-end, with its Nigerian and Iranian operations driving growth over the twelve month period, with net additions of six million and five million subscribers respectively.

Etisalat Posts 5% Increase in 2009 Revenues

UAE-based telecoms operator Emirates Telecommunications Corporation (Etisalat) has reported its preliminary consolidated results for the year ended 31 December 2009, announcing net revenues of AED30.83 billion (USD8.93 billion), an increase of 5% compared to AED29.36 billion posted in 2008. The company’s net profit for full-year 2009 rose to AED8.836 billion, up from AED8.511 billion a year earlier, which included profit from the sale of shares in Saudi cellco Mobily of AED892 million.

Excluding this exceptional item, net profit after federal royalty for 2009 would have increased by AED1.217 billion, 16% higher than 2008. Total assets increased 13% to AED40.38 billion compared to AED35.62 billion in 2008. Etisalat did not reveal quarterly figures, but Reuters has calculated 4Q09 profit at AED1.99 billion (39% higher than the year-ago quarter), based on previous financial statements.

The number of Etisalat’s domestic mobile subscribers exceeded 7.74 million at 31 December 2009, up 6% year-on-year, while fixed line customers reached 1.31 million (a fall from 1.358 million in 2008) and internet subscribers grew 16% in 2009 to total 1.33 million, although the company did not reveal how many of those were broadband users. In 2009 Etisalat launched its ‘eLife’ fibre-to-the-home (FTTH) network and is currently working on making Abu Dhabi the first capital city in the world to be totally connected by fibre-optic infrastructure. The company is also aiming to make the UAE one of the first countries in the world to be entirely covered with fibre-optic services in 2011.

Zain Reports 5.5% Raise in Q2 Profits

Kuwaiti mobile operator Zain, the third-largest Arab telecoms firm by market value, posted a 5.5 percent rise in second-quarter net profit as the number of subscribers rose. Net profit in the first half was 154.5 million dinars ($538.3 million), Zain said in a statement on Tuesday, without giving a quarterly figure.

Reuters calculated a second-quarter net profit of 78.8 million dinars based on previous financial data, which showed the firm made 75.7 million dinars in the first quarter. The number of customers rose 37 percent to 69.5 million in the first half, the statement said.

Zain said revenues in the six months to June 30 rose 24.1 percent to 1.16 billion dinars compared with the same period last year, and EBITDA advanced 46.3 percent to 512.2 million dinars. It gave no quarterly data.

First-half results include a gain of 26.6 million dinars from an initial public offering in Zambia and losses from currency fluctuations of 31.3 million dinars, Chief Executive Saad al-Barrak said in the statement.

"With improving currency stability in many of our African operations we expect even better in the second half," he added.

Zain announced at the start of the year a goal of 30 percent net profit growth but a spokesman reiterated on Tuesday this target looked "a little bit ambitious".

Emirates Telecommunications Corp (Etisalat) is interested in buying a 51 percent stake in Kuwait's Zain Group at the right price, the chief executive of its international unit said on Tuesday.

Zain, which is partly owned by the country's sovereign wealth fund, said on Monday it still hoped to sell its African unit despite French media and telecoms giant Vivendi calling off talks to buy a majority stake in the business.

Zain has spent billions to expand in the Middle East and Africa and operates in 23 countries to offset rising competition at home in Kuwait where VIVA, an affiliate of Saudi Telecom (), started operating as third mobile firm last year.

- Reuters

Etisalat Reports US$4billion H1 Revenue

UAE-based telecoms operator Etisalat has posted its fiscal results for the six months ended 30 June 2009, recording a 10% year-on-year rise in revenue to AED14.74 billion (USD4.01 billion). Meanwhile, net profit totaled AED4.59 billion for the first half of 2009, down from AED5.05 billion reported in the same period a year earlier, though 2008 results included AED892 million earned from the sale of shares in Saudi cellco Mobily. Excluding this exceptional item, net profit after federal royalty for the six months ended June 2009 was 11% higher than the same period in 2008. Total assets stood at AED67.24 billion at end-June 2009, up 7% year-on-year.

'The growth in revenues achieved will help us expand and develop our national and international business units,' said Mohammed Omran, chairman of Etisalat, adding, 'We have reduced our operational expenditure in the period and have become even more selective in choosing our international investments. We are achieving this by making use of the current financial environment and searching for positive opportunities that arise during these times.'

In terms of subscribers, the company posted a domestic mobile subscriber base of 7.26 million at 30 June 2009, down by 81,000 compared with the end of the first quarter. Domestic fixed line subscribers also fell by 19,000 to 1.33 million during the second quarter of 2009, although Etisalat's internet customer base grew from 1.20 million to 1.23 million in the same period. According to the chairman, Etisalat a worldwide subscriber base of more than 85 million subscribers from a population base of 1.7 billion, and expects customer numbers to reach 100 million in 2010.

Millicom Reports 5% Rise in Q2 Revenues

Millicom International has reported a five percent rise in Q2 revenues to US$814 million compared to a year ago but a drop of 13% in net profits of $114 million, down from the US$132 million a year ago. In Q2 09, Millicom added 1.7 million net new mobile subscribers, reaching 30.8 million total mobile subscribers, an increase of 25% versus Q2 08 as Millicom continues its focus on attracting the more loyal and higher revenue generating customers.

Mikael Grahne, CEO of Millicom, commented: "Our Q2 09 results continue to show the benefits of the actions taken in the last few quarters to focus on both margins and cash flow generation, whilst maintaining or improving our market position. Our EBITDA margin moved up to 45.6%, which is above our long term target margin for the Group, as we tighten cost controls and adapt our product offering to changing market conditions. Cash flow continues to improve, with operating free cash flow standing at 15% of revenues in Q2 09. We are also pleased to have grown our market share by 0.7 percentage points over the quarter.

In Central America, Honduras grew its subscriber base by 19% year on year, despite the entry of a third operator at the end of Q4 08. Guatemala grew its subscriber base by 18% year-on-year and El Salvador by 17%.

In South America, total subscribers increased by 17% year-on-year with Bolivia showing growth of 51%. In Colombia, the increase in subscribers was 5%, and in Paraguay it was 15%.

In Africa, the best performing markets in terms of net subscriber additions were Chad which grew by 93% year-on-year, adding 110 thousand net new subscribers in Q2 09, and Tanzania, which grew by 81% year- on-year, adding 413 thousand net new subscribers in Q2 09. In Senegal, total subscribers increased by 26% and 144 thousand net new subscribers were added in Q2 09, which is indicative of the continuing trust that subscribers are placing in the Tigo brand.

The topic of the planned sale of the company's Asian assets, Grahne added, "The disposal of our Asian assets is in progress and expressions of interest have been received from a number of parties for the three assets. We expect the disposal to be completed by Q1 2010."

Capex is expected to be approximately $750 million in 2009 (excluding capex relating to Asia of approximately $100m). The EBITDA margin is expected to be maintained at the current level for the full year. Millicom expects operating free cash flow to be in the mid teens as a percentage of revenues for the 2009 year.

Impairments Bring Vodafone Profits Down by 54%

Vodafone Group plans to accelerate its plans to reduce operating costs amid an expected further decline in profits this year. The mobile operator reported net profit for the fiscal year to March 2009 of GBP 3.08 billion, down 54.4 percent from a year earlier due to GBP 5.9 billion in impairment charges to write down the value of its poorly performing activities in Spain, Turkey and Ghana.

 

Operating profit, excluding the one-time charges, rose 16.7 percent to GBP 11.76 billion, helped by the weaker pound. Annual revenues rose 15.6 percent to GBP 41.02 billion, thanks to positive currency effects and acquisitions, but were down 0.4 percent on an organic basis due to regulatory price cuts and the slowing economy. The proportionate customer base grew to 302.61 million, from 288.99 million in December and 260.49 million a year earlier.

 

For this year, Vodafone expects results in Europe to remain under pressure while Africa and Asia will also see a slowdown in growth. The company forecast adjusted operating flat to lower in the fiscal year to March 2010, at GBP 11.0-11.8 billion. Vodafone plans to accelerate its previously announced cost-reduction plan in order to achieve 65 percent of the planned GBP 1 billion in savings in the current year

 

As a result, the company expects the EBITDA margin to fall at a slower rate than the 1.8 point drop seen last year. Vodafone aims to boost free cash flow this year to GBP 6.0-6.5 billion from GBP 5.7 billion last year, while capex is estimated at similar levels to last year's GBP 5.91 billion, after adjusting for exchange rates.

 

In its main market Europe, Vodafone posted annual revenues up 13.6 percent to GBP 29.63 billion, thanks to the weaker pound versus the euro. Organic revenues fell 2.1 percent, due to both lower equipment sales and a 1.7 percent drop in services revenues. In Q4, service revenues fell 3.3 percent.

Spain showed the biggest annual decline, with organic revenues down 4.9 percent, while Germany fell 2.5 percent due to growing use of the SuperFlat tariffs there. Full-year EBITDA rose 7.6 percent to GBP 10.42 billion, but was down 7.0 percent on an organic basis. The UK led the profit decline at a drop of 15.3 percent, hut by higher customer retention costs as the 18-month contracts introduced in 2006 came to an end.

 

In Africa and Central Europe, revenues rose 11.2 percent to GBP 5.50 billion. Organic sales were up 3.9 percent, as a strong performance at Vodacom offset weakness in Turkey and Romania. EBITDA was up 1.3 percent to GBP 1.69 billion, but fell 2.4 percent on an organic basis due to network investments, spending on the turnaround plan in Turkey and intense competition in Romania.

 

Finally, in Asia Pacific and the Middle East, Vodafone increased sales 32.3 percent to GBP 5.82 billion and EBITDA rose 17.8 percent to GBP 1.74 billion, mainly due to the takeover in India as well as subscriber growth. On a pro forma basis, revenues rose 19 percent and EBITDA was up 6 percent. However the EBITDA margin declined to 29.9 percent due to weakness in Australia.

 

 

MTN Reports Growth In Subscriber Numbers

­South Africa based MTN Group has published an update of its global subscriber based and recorded 98.2 million customers at 31 March 2009. This is an 8% increase for the quarter from 90.65 million subscribers recorded at the end of last year. The company noted that while strong subscriber growth continues to be a feature in almost all countries in which it operates in, currency volatility has generally had a more negative impact on ARPU reported in US$. Changes to spending patterns have been varied as economies respond to the global economic situation.

South and East Africa (SEA) region contributed 26% (December 2008: 27%) of the Group's total subscribers while West and Central Africa (WECA) and Middle East and North Africa (MENA) contributed 45% (December 2008: 44%) and 29% (December 2008: 29%), respectively.

The SEA region increased its subscriber base by 4% for the quarter. The South African operation contributes 69% to the region's subscribers, increasing 2% to 17.43 million for the quarter ended 31 March 2009. The modest increase in subscribers was due to the mix of seasonal trends, weakening economic conditions and aggressive competition. Uganda increased its subscriber base by 13% due to the continued success of MTN Zone.

The WECA region increased its subscriber base by 10% for the quarter. The strong growth in the region was primarily due to growth in Nigeria which contributes 59% to the region's subscribers and recorded a 12% increase in its subscriber base to 25.9 million. This was mainly due to continued improvements in network quality and capacity with 173 BTS's added in the quarter. Ghana increased its subscriber base by 5% despite fierce competition. Both Cameroon and Cote d'Ivoire increased their subscriber bases by 7% to 3.82 million and 3.81 million respectively.

The MENA region recorded a 9% increase in subscribers for the quarter. This was due to continued growth from the Iran operation, which contributes 63% to the region's subscribers and increased its subscribers by 14% to 18,252,000. The disappointing slowdown of subscriber acquisitions in Sudan and Syria is mainly attributed to the economic downturn in the respective countries. Sudan increased its subscriber base to 2.66 million while Syria saw its base drop by 3% to 3.43 million subscribers.

MTN South Africa's blended ARPU decreased by 6%. This is as a result of increased penetration into lower market segments, seasonal trends and a slowdown in consumer spending. Iran's ARPU remain relatively stable notwithstanding seasonal trends and increased penetration. The decline of many local currencies against the US$ has negatively affected ARPU trends. Larger operations including Nigeria, Cote d'Ivoire, Syria and Sudan experienced significantly more resilience in local currency ARPU than reflected in the reported US$ number.

Zain Reports 3.3% Rise in Q Profits

Just a couple of days after announcing 2,000 job cuts, Zain has reported a 3.3% rise in first-quarter profits to KWD 75.7 million (US$260.5 million), compared with KWD 73.3 million a year ago. Consolidated revenues jumps by 25% to KWD 567.2 million (US$1.96 billion), an increase of 25% compared to Q1 2008. Profits were held back due to costs associated with the recent launch of networks in the Kingdom of Saudi Arabia and Ghana.

The company said that it ended the quarter with 64.7 million customers - a jump of 41% over the year.

Commenting on the results, Zain Group CEO Dr Saad Al Barrak said: "Despite the challenges imposed by the global economic crisis and the competitive markets in which we operate, these impressive first quarter results are testament to the sound management practices of the Group and a reflection of our unwavering commitment to reach our 2011 target of being a top-ten global mobile operator."

Regarding Saudi Arabia and Ghana, Dr Al Barrak commented: “Both operations have performed beyond expectations in attaining impressive customer numbers to date and we expect them to provide healthy fiscal gains in the years to come.”

Dr Al Barrak also confirmed that Zain is working on several fronts to overcome the changes in global markets such as the increasing cost of financing and the sharp volatility of currency rates, pointing out that “Zain was able to achieve realistic results despite the fact that the latter cost the company KWD 18.4 million (US$63.3 million).”

France Telecom Q1 Profits Fall Due to TV Services

France Telecom has reported a 4.4% drop in first-quarter profits due to costs incurred by its French television services. EBITDA was down 4.4% on a comparable basis, at EUR 4.3 billion. The EBITDA margin dropped 1.7 points from the first quarter of 2008.

Revenues grow 0.4% on a comparable basis, but currency fluctuations resulted in recorded sales dropping to EUR 12.7 billion from EUR 13 billion a year ago. The firm cited a strong performance in France with revenues up 2.1%, in Africa and Middle East (+5%) and in Enterprise services (+0.4%). United Kingdom trend was unchanged from fourth quarter of 2008 (-0.6%); as anticipated, revenues dropped in Spain ( 4.1%) and in Poland (-4.7%).

The company reported worldwide that it had 122.9 million customers at 31 March 2009 (excluding MVNOs), a 9.5% increase year-on-year. The number of contract customers continued to grow rapidly, up 9.0% in one year. The number of 3G broadband customers was up nearly 80% in one year, with 20.6 million customers at 31 March 2009.

The MVNO customer base in Europe rose to 3.6 million at 31 March 2009 (of which 1.9 million in France), compared with 2.2 million a year earlier (of which 1.5 million in France).

Commenting on the results for the first quarter of 2009, Didier Lombard, France Telecom Chairman and Chief Executive Officer, stated: "In an economic environment that continues to weaken, especially outside of France, the Group has been able expand its customer base in the first quarter of the year to more than 183 million customers, with the number of mobile customers increasing more than 9% to almost 123 million and broadband services rising nearly 9% to 13 million ADSL-equipped households."

He added, "The Group is able to confirm its guidance of 8 billion euros in organic cash flow for 2009, despite the pressures on consumer and business behaviour resulting from the overall economic conditions."

France Telecom Q1 2009 results

Mobinil Q1 Profits Fall Below Forecasts

Eygpt's MobiNil, which is in the midst of a tussle between Orascom and France Telecom has posted a 6% drop in first-quarter profits to EGP424 million (US$75 million) - below most analysts expectations. Imputed interest amounts relative to 3G installment payments charged during the first quarter amounted to EGP 29 million and higher interest costs are the main driver for the decrease.

Revenues of EGP2.49 billion (US$445 million) was up on the EGP2.26 billion a year earlier. Capital expenditure for the first quarter reached EGP 420 million (US$75 million).

Mobinil ended the quarter with 21.179 million subscribers which represents an increase of 31% or 1.064 million net additions.

Commenting on first quarter 2009 results, Alex Shalaby, Chairman said: “Mobinil continued to grow in tough economic times and delivered on its identified growth strategy. This again confirms Mobinil’s success in building ties with its customers by providing quality services. In difficult economic conditions it is also gratifying to see Mobinil achieving on its profitability."

First quarter blended ARPU reached EGP 39 (US$6.97) with a decline of 16% over the same period last year mainly driven by the change of subscriber mix as the firm continues to penetrate lower market segments.