Riots, taxes drive Orascom into the red

Nicole McCormick
18 Mar 2010
00:00

Orascom Telecom Holdings sunk into red ink in the fourth quarter of 2009, posting a net loss of $46.4 million.

Full-year net income also fell 25% to $379.47 million, with revenues dipping 5% to reach just over $5 billion.

The Egyptian-based firm attributed Q4’s net loss mainly to the recent riots in Algeria that followed a football match between Algeria and Egypt.

It also said that higher taxes in Pakistan hurt profits.

In Pakistan, Mobilink reported stable revenues in local currency in 2009, but consolidated ebitda declined 9.2% to PKR31.7 billion ($376.89 million), although it rose 8.9% quarter on quarter.

In Bangladesh, subsidiary Banglalink’s consolidated ebitda increased from $13.68 million in 2008 to $117.2 million in 2009, but fell on a quarterly basis from $37.2 million in Q3 to $22.2 million in Q4.

Revenues in grew 2.8% to $91.56 million quarter on quarter.

“The decrease over Q3 was driven by a more aggressive marketing approach to capture market share by introducing promotions and offers that subsidized occasionally the SIM tax; a reaction to the strategy adopted by certain competitors who started to re-subsidize the SIM tax,” the firm said.

Meanwhile, North Korean venture Koryolink “is performing strongly and rapidly expanding its sales and network coverage throughout the country,” said group CEO Khaled Bichara.

Subscribers touched almost 92,000 as of December.

Koryolink also posted stable Q4 ebitda of $7.16 million, with 7.5% higher revenues of $25.2 million.

Orascom’s capital expenditure in 2009 was “substantially lower” than the previous year as a result of “a reduction of investments mainly in Pakistan and Bangladesh.”

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