Orascom Telecom posts $23m quarterly loss

07 August 2013

Orascom loss lower than analysts expected, number of subscribers increased

Orascom Telecom Holding reported a $22.8m net loss for the second quarter of 2013, a decline of 171.7 per cent compared with the same quarter last year. Its losses for the first half of 2013 totalled $226.33m.

The telecoms operator’s loss this quarter for the most part has been driven by foreign currency charges mainly in Algeria and Pakistan of $86m and financial expenses of $126m, the company said in its earnings release.

Revenues decreased to $903.8m, largely due to lower usage per subscriber in Bangladesh, though revenues in Algeria and Pakistan grew slightly – 2.6 and 4.8 per cent respectively.

Orascom’s subscribers increased 4 per cent year-on-year to about 86 million customers at the end of the quarter, driven by growth in Pakistan and Bangladesh, as well as additions to subscribers in Sub-Saharan Africa and Canada.

“Our operations continued to be negatively impacted by regulatory and government actions that are beyond our control and decisions,” says Ahmed Abou Doma, chief executive officer of Orascom Telecom.

“Our revenues stood at $904m for the quarter. This represents an organic growth of 1 per cent compared to last year, in spite of the ongoing ban in Algeria, the slowdown in Bangladesh due to the application of the regulatory directives regarding suspected VoIP [voice over internet protocol] customers and major power blackouts in Pakistan,” he adds

Russia’s Vimpelcom, which owns 51.9 per cent of Orascom, is in an ongoing dispute with the Algerian government over ownership of Orascom’s subsidiary Djezzy. The Algerian unit, which has around half of the country’s marketshare, has been banned from conducting foreign exchange transfers for the past three years. Talks between the parties over Algeria buying a majority stake in Djezzy failed in May.

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