Network Switch Saps Mobinil Q1 Profit
Egyptian mobile firm Mobinil slumped to a first-quarter net loss of 74 million Egyptian pounds ($12.24 million) due to the costs of switching its network to 3G and said its outlook was uncertain because of political volatility.
May 1, 2012 10:12 by kippreport
Egyptian mobile firm Mobinil slumped to a first-quarter net loss of 74 million Egyptian pounds ($12.24 million) due to the costs of switching its network to 3G and said its outlook was uncertain because of political volatility. “The high depreciation and amortisation resulting from the partial swap of the network from 2G to 3G in a continuous effort to modernise the network continues to weigh on the net result,” the firm said in a statement on Monday.
Egypt’s financial regulator earlier this month approved a tender offer by France Telecom that would cement its control over Mobinil. France Telecom plans to purchase shares in Mobinil held by its Egyptian venture partner Orascom Telecom Media and Technology (OTMT) for 1.5 billion euros.
Mobinil said revenue in the first quarter of 2012 rose 3.9 percent year-on-year to 2.5 billion pounds on growth in data and broadband services such as smartphones and internet. Total subscriber numbers of 32.6 million at the end of quarter were up 7.5 percent year-on-year. But the firm said the outlook for 2012 was uncertain due to Egypt’s political instability.
Many firms were hit in the wake of the uprising that toppled president Hosni Mubarak, prompting an exodus of tourists and investors spooked by lax security and political uncertainty.
Mobinil cited the “difficult and volatile political climate” weighing on the economy and “unstable regulatory environment” but added that it expected to witness growth and improving margins provided the country’s politics stabilised. Voting in a presidential election starts in May.
Mobinil shares inched up 0.3 percent on Monday. The main index rose 0.5 percent.
(Reporting by Shaimaa Fayed and Yasmine Saleh; Editing by David Cowell)