Orascom Telecom Q1 Down on Currency Devaluations

Egypt's Orascom Telecom has reported a 66 percent drop in its first-quarter profits to US$72 million - largely due to local currency devaluations against the US Dollar. Revenues dropped by 4 percent to US$1.2 billion.
In US$, revenues for Mobilink decreased by 1% in local currency vs. a decrease of 23% in US$, revenues for Tunisiana increased by 24% in local currency vs an increase of 3% in US$.
Total subscribers exceeded 80 million, an increase of 9% over March 2008, driven by an impressive growth performance in Egypt, up 31%, Bangladesh, up 30%, and Tunisia, which grew 13%. Subscriber growth in Algeria was weak as a result of a lengthy approval process for our promotion by the regulator.
Naguib Sawiris, Chairman and CEO of OTH, commented on the results: “The first quarter of 2009 confirmed our expectation that economic growth would slow further leading to a more challenging operating environment. OTH’s US$ revenue performance in Q1 was negatively impacted by currency devaluations in Algeria, Pakistan and Tunisia, which respectively lost 9%, 22% and 17% of their value over Q1 2008."
"We have started to implement our OPEX reduction program across all our main subsidiaries and we are on track to reduce OPEX in local currency by 7-9% vs the 2009 budget. The aim of these processes is to ensure OTH maintains a solid liquidity position that will allow it to weather the difficult credit market conditions without specific funding requirements."
The company is also looking at other measures, including the possible stock market listings of its operations in Algeria and Tunisia, along with already rumored merger with another operator in Bangladesh. The firm is also looking at tower sharing opportunities in Pakistan.
For its operations in the secretive North Korea, the company recorded revenues of US$4.46 million in the first quarter with 19,208 subscribers. The North Korean ARPU was a surprisingly high US$24.7, which is the second highest in the group, behind Lebanon.
Posted to the site on 27th May 2009
http://www.cellular-news.com/story/37683.php?s=h
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From: Khurram Naveed