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Tue 28 Jul 2009 08:33 PM

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Egypt's Mobinil Q2 net jumps 26%, beats forecasts

UPDATE 2: Egyptian mobile operator adds a further 1.674m customers in Q2.

Egypt's Mobinil Q2 net jumps 26%, beats forecasts
BEATING EXPECTATIONS: Mobinil, Egypts biggest mobile operator by subscriber numbers, beats analysts expectations. (Getty Images)

Egypt's largest mobile firm by subscribers posted a 26 percent rise in second quarter net profit on Tuesday to 536 million Egyptian pounds ($96.5 million), exceeding analysts' expectations.

The firm said it added 1.674 million new subscribers in the three months to end-June and reported revenue of 2.725 billion pounds.

"Despite the challenging global economical situation and increased competition, we were able to achieve a double digit growth in our turnover and profits," Mobinil Chief Executive Hassan Kabbani said in a statement.

"We will pursue our efforts to offer optimal quality of both data and voice services to ensure the best customer experience," he added.

The results came in well above forecasts from seven analysts surveyed by Reuters, who had expected net profit to range between 410 million and 471 million pounds on revenue of 2.42 billion to 2.84 billion pounds.

The firm also surpassed expectations on EBITDA margin (earnings before interest, taxation, depreciation and amortisation), at 48.3 percent. Total subscribers also beat forecasts, reaching 22.853 million subscribers by end-June.

"It looks good," said May Khamis, an analyst at HC Securities. "The subscriber additions were surprisingly very, very good and their margins are impressive. Overall, they are very positive results."

The firm said its blended ARPU (average revenue per user) had declined to 43 pounds, at the top end of expectations.

Khamis said aggressive promotion had helped increase subscriber numbers, while management efficiencies aided margin growth.

Mobinil is the subject of an ownership dispute between its two biggest shareholders, Orascom Telecom and France Telecom, that has included court arbitration and regulator rulings.

Orascom chairman Naguib Sawiris said earlier this month that the dispute was beginning to affect Mobinil's operations.

Mobinil shares ended Tuesday's session, before its results were released, at 201 pounds. The shares have jumped almost 37 percent since the start of the year, outperforming most regional peers on investor hopes of a positive resolution for the firm.

By comparison, Qatar's Qtel has gained 30 percent, UAE-based Etisalat 24.7 percent and du 29 percent. Orascom Telecom has gained 15.7 percent.

Kuwait's Zain has jumped 52.4 percent since January 1 as it seeks to sell off its African assets. (Reuters)

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