OrascomTelecom Hldgs (OTLD) - Orascom Telecom - Earnings Release 3Q12
RNS Number : 0721R
Orascom Telecom Holdings S.A.E
14 November 2012
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Cairo/London (November 14, 2012), Orascom Telecom Holding S.A.E. ('OTH', or
'the Group') (EGX: ORTE.CA, ORAT EY. LSE: ORTEq.L, OTLD LI), a leading
provider of mobile telecommunications in Africa, Asia and North America,
announces its consolidated financial and operating results for the period
ending September 30, 2012, demonstrating 14% subscribers growth, 6% revenue
growth and EBITDA growth on an organic basis year on year (YoY).
1. 3Q12 Highlights^1
· Total subscribers surpassed85 million, an increase of 14%^2 YoY.
· Revenuesreached USD 885 million, exhibiting an organic^3 growth of 6%
· EBITDA amounted to USD 425 million, showing an organic^3 growth of 6%
YoY, driven by top line growth and operational excellence initiatives despite
the negative impact from Ramadan.
· Stable YoY group EBITDA margin of 48.1%. EBITDA margins for the
subsidiaries were as follows: Djezzy 58.3%, Mobilink 43.0%, banglalink 29.4%,
and Telecel Globe 47.7%.
· Net income before minority interest stood at USD 111 million, mainly
driven by foreign exchange gain coupled with healthy profit from continuing
operations. Net income attributable to equity holders amounted to USD 106
million compared to a net loss of USD 1.5 million for the same period last
· Net debt^4 stood at USD 2,981 million, a slight decrease of over 1%; Net
Debt/EBITDA of 1.9x as at September 30, 2012.
Table 1: Group key indicators
Total subscribers 85,285 75,027 13.7% 85,285 75,027 13.7%
Revenues (USD) 884,714 925,453 (4.4%) 6% 2,718,422 2,739,867 (0.8%)
EBITDA (USD) 425,477 448,175 (5.1%) 6% 1,329,155 1,300,301 2.2%
EBITDA margin 48.1% 48.4% (0.3) 48.9% 47.5% 1.4
Net income (USD) 110,669 9,692 n.m. 263,145 783,822 (66.4%)
EPS (USD per GDR) 0.14 0.72 (80.6%) 0.24 0.72 (66.7%)
Capex (USD) 55,184 128,032 (56.9%) 198,683 277,171 (28.3%)
1. Income Statement and Balance Sheet figures are in US dollars in accordance
with the International Financial Reporting Standards (IFRS).
2. Excluding Alfa, Mobinil, koryolink and Powercom Ltd. subscribers from last
year for comparative purposes.
3. Organic growth for Revenue and EBITDA: non-IFRS financial measures that
reflect changes in Revenue and EBITDA excluding foreign currency movements and
other factors, which includes business under liquidation, disposals, mergers
and acquisitions (Please refer to glossary of terms for the definition of
4. Net debt is calculated as a sum of short term debt, long term debt, less
cash and cash equivalents.
Note: Figures for the period ending 30 September 2011 were represented to
reflect the effect of the spun-off assets.
Ahmed Abou Doma, Chief Executive Officer, commented on the
We are pleased to announce Orascom Telecom's third quarter results. Our
operations witnessed solid performance
inlocal currency terms. Nevertheless, the fluctuation of local
currencies against the US dollar continued to adversely
affect our IFRS consolidated results. Consolidated revenue and group
EBITDA recorded an organic growth of 6%,
another testimony to strong operational excellence initiatives across all
of our operations, leading to profitable
growth for yet another quarter. Total subscribers surpassed the 85
million mark, achieving 14% growth YoY, mainly
driven by the increase in banglalink's subscribers, up 21% YoY.
Growth in consolidated revenues resulted from strong subscriber growth and an
increase in data and VAS uptake in our main subsidiaries, namely in Algeria,
Pakistan and Bangladesh. EBITDA increased as a result of this growth and cost
savings in our major subsidiaries.
2. Performance Review
Table 2: Subscriber base
Djezzy, Algeria 17,693,940 16,288,615 8.6%
Mobilink, Pakistan 36,073,988 33,415,696 8.0%
banglalink, Bangladesh 26,775,921 22,139,953 20.9%
Telecel Globe^2 4,230,847 2,825,056 49.8%
Subtotal 84,774,696 74,669,320 13.5%
Wind Canada, Canada 510,484 357,983 42.6%
Total 85,285,180 75,027,303 13.7%
Total subscribers increased by 14% YoY exceeding 85 million subscribers at the
end of the quarter, mainly driven by 21% subscriber growth in Bangladesh.
banglalink's subscriber base is now nearing 27 million, supported by
particularly strong gross additions to the network towards the end of this
In Algeria, Djezzy grew its subscriber base by 9% YoY, as a result of
continued subscriber acquisition and active retention efforts through the
"Imtiyaz" loyalty program. In Pakistan, Mobilink subscribers increased 8% YoY
as a result of customer acquisitions coupled with lower churn compared to the
Telecel Globe subscribers increased nearly 50% compared to the previous year,
mainly driven by strong additions in Zimbabwe, leading to an increase of 92%
YoY in Zimbabwe's subscriber base. In Canada, Wind Mobile grew its subscriber
base by 43% compared to 3Q 2011, through its continued focus on "Value Plus"
attracting postpaid additions to the network.
1. For comparative purposes, the subscriber base for 3Q 2011 was represented
to reflect the impact of the demerger of Mobinil, koryolink and Alfa.
2. Including Zimbabwe.
Table 3: Revenues in US dollars
Djezzy 447,390 (8.1%) (1.9%)
Algeria 486,672 1,375,475 1,402,720
Mobilink, 269,415 (4.3%) 0.2%
Pakistan 281,491 850,591 848,530
banglalink, 144,459 11.7% 8.7%
Bangladesh 129,306 416,200 383,013
Globe, 22,555 21,340 5.7% 67,834 69,940 (3.0%)
Total GSM 883,819 (3.8%) 0.2%
918,809 2,710,100 2,704,203
Ring (86.5%) (76.7%)
895 6,644 8,322 35,664
Consolidated 884,714 925,453 (4.4%) 2,718,422 2,739,867 (0.8%)
Table 4: Revenues in local currency
Djezzy, Algeria (DZD) 36.2 35.4 2.3% 106.3 101.8 4.4%
Mobilink, Pakistan (PKR) 25.5 24.4 4.5% 78.6 72.9 7.8%
banglalink, Bangladesh(BDT) 11.8 9.6 22.9% 34.2 28.0 22.1%
Revenues for the third quarter were adversely affected by the local currency
devaluation against the US dollar in Algeria and Pakistan, leading to weaker
US dollar performance compared to solid profitable growth in local currency
In Algeria, revenues increased by 2% in local currency terms in comparison to
3Q 2011, while showing an 8% decline in US dollar terms. The increase in
revenues is mostly due to a larger subscriber base, as well as on-going
customer retention programs. In Pakistan, revenues for 3Q 2012 increased over
4% in local currency terms compared to the previous year, while the
devaluation of the local currency against the US dollar led to a decline of
In Bangladesh, revenues achieved a significant growth of 23% YoY in local
currency terms, driven by a larger subscriber base, in addition to a higher
level of VAS and data adoption, and targeted acquisitions of the higher value
segment, as well as reactivation promotions.
Telecel Globe's revenues increased 6% YoY in US dollar terms, resulting from a
larger subscriber base and an increase in data revenues in Burundi.
1. 2011 comparative figures were represented to reflect the completion of the
2. As per IFRS rules, Telecel Globe figures have not been represented in 9M
2011, to reflect the disposal of Powercom Ltd. in 2Q 2011. It should be noted
that Telecel Globe revenues include the Central African Republic and Burundi,
as Zimbabwe is not consolidated.
Table 5: Blended average revenue per user (USD)
Djezzy, Algeria 8.3 9.9 (16.2%)
Mobilink, Pakistan 2.4 2.7 (11.1%)
banglalink, Bangladesh 1.8 1.9 (5.3%)
Table 6: Blended average revenue per user in local currency
Djezzy, Algeria (DZD) 668.3 714.9 (6.5%)
Mobilink, Pakistan (PKR) 230.6 235.6 (2.1%)
banglalink, Bangladesh (BDT) 149.2 147.1 1.4%
The associated seasonality of Ramadan had a slowing impact on ARPU in Algeria
and Pakistan, leading to lower ARPU for both Djezzy and Mobilink. Moreover, it
is worth noting that ARPU in US dollar terms was adversely affected by local
In Algeria, ARPU decreased by 7% in local currency terms due the
aforementioned seasonality alongside an increase in the multi-SIM phenomenon,
in addition to the revision of the interconnect catalogue during July 2012.
In Pakistan, ARPU decreased by 2% in local currency terms, mostly due to the
government-ordered shut down of all cellular networks for two days during the
quarter, including the peak day of the Feast holiday, in addition to the
effect of floods in the southern and central regions of the country.
In Bangladesh, ARPU increased by 1% in local currency terms, as a result of
higher minutes of usage (MOU) compared to the same period last year.
Table 7: EBITDA in US dollars
Djezzy 260,725 (10.0%) (1.7%)
(Algeria) 289,764 818,512 833,003
Mobilink 115,783 (0.6%) 6.2%
(Pakistan) 116,453 366,572 345,217
banglalink (4.4%) (2.4%)
(Bangladesh) 42,433 44,401 140,577 143,960
Globe 10,756 7,009 53.5% 26,347 13,067 101.6%
Total GSM 429,697 (6.1%) 1.3%
457,627 1,352,008 1,335,247
Ring 179.2% (34.8%)
(3,526) (1,263) (6,492) (9,956)
OT Holding & (91.5%) (34.5%)
Other^4 (694) (8,189) (16,361) (24,990)
Total 425,477 (5.1%) 2.2%
Consolidated 448,175 1,329,155 1,300,301
Table 8: EBITDA in local currency
Djezzy, Algeria (DZD) 21.2 20.9 1.4% 63.4 60.3 5.1%
Mobilink, Pakistan (PKR) 11.0 10.0 10.0% 33.9 29.6 14.5%
banglalink, Bangladesh (BDT) 3.5 3.2 9.4% 11.5 10.4 10.6%
Consolidated EBITDA for 3Q 2012 showed an organic growth of 6% over the same
period last year as a result of operational excellence initiatives across the
board, leading to profitable growth.
In Algeria, EBITDA increased by 1% in local currency terms, while dropping 10%
in US dollar terms. The improvement in local currency EBITDA is a result of
cost savings and the ongoing restrictions imposed on OTA.
In Pakistan, EBITDA grew by 10% in local currency terms, while showing
stability in US dollar terms, mostly on account of ongoing cost control
measures, as well as reduced SIM card costs due to the mitigation of churn.
In Bangladesh, EBITDA increased by 9% YoY in local currency terms, while
dropping 4% in US dollar terms. EBITDA growth in local currency was slowed by
higher subscriber acquisition costs YoY, as a result of increased channel
sales in anticipation of a slowdown during 4Q 2012 due to a change in the
activation process of new connection sales from October 2012. Telecel Globe's
EBITDA showed significant improvement YoY, increasing over 53%, surpassing
revenue growth and boosting profitability as a result of cost saving
Group EBITDA margin for 3Q 2012 was 48.1%, despite a flat GSM margin for the
quarter, which was negatively impacted by the performance of Algeria and
1. EBITDA excludes management fees which were previously treated as a cost in
each subsidiary and as a revenue for the holding company.
2. 3Q 2011 and 9M 2011 figures were represented to reflect the completion of
the demerger process.
3. As per IFRS rules, Telecel Globe figures were not represented in 9M 2011,
to reflect the disposal of Powercom Ltd.
4. Other non-operating companies include: CAT, OTV, OIH,OTI M, Cortex,
EUROASIA, FPPL, ITCL, IWCPL, Moga, Oratel, Swyer, OTHC, OTASIA, OSCAR, OTESOP,
OT SARL, TMGL, TIL, TIL SA.
2-5 Net Income
Net Income attributable to Equity Holders of the Parent amounted to USD 106
million for the quarter exhibiting strong growth YoY. The improvement in net
income for the quarter was mostly driven by strong profit from continuing
operations. EPS for the three months ended September 30, 2012 amounted to USD
Table 9: Capex in US dollars
Djezzy 22.9% 37.4%
(Algeria) 6,125 4,983 26,381 19,202
Mobilink 28,447 (47.8%) (44.9%)
(Pakistan) 54,503 83,510 151,525
banglalink 19,689 (69.2%) (9.0%)
(Bangladesh) 63,934 83,199 91,420
Telecel Globe (80.0%) (62.8%)
923 4,612 5,593 15,024
Total 55,184 (56.9%) (28.3%)
128,032 198,683 277,171
Consolidated 6.2% 13.8% (7.6) 7.3% 10.1% (2.8)
Total Capex amounted to USD 55 million for 3Q 2012, decreasing by 57% YoY. In
Pakistan, the slowdown in capacity roll-out for the network before proceeding
with network modernization led to a 48% decline in Capex. In Bangladesh, Capex
decreased 69% YoY compared to last year's intensive customer acquisition and
network roll-out. Capex for Telecel Globe remained low for the quarter.
2-7 Cash and Debt
Net debt declined by over 1% in the first nine months of 2012 to reach USD
2.98 billion in comparison to USD 3.02 billion as at 31 December 2011, mainly
due to increased cash flow from operations resulting from increased
profitability, and a decrease in cash outflow on Capex, leading to Net Debt/
EBITDA of 1.9x as of 30 September 2012.
3. OTH Operations
The Group operates in seven countries with favourable dynamics in Africa, Asia
and North America. It is worth highlighting that OTH serves a population of
approximately 449 million people with an average mobile penetration rate of
Note: Figures from CIA Factbook. Mobile penetration is based on September 30,
2012 subscriber figures and market share.
3-1 Djezzy, Algeria
Table 11: Djezzy key indicators
Revenues 447,390 486,672 (8.1%) Subscribers 17,693,940 16,288,615 8.6%
Revenues 36.2 35.4 2.3% Market 56.3% 57.7% (1.4)
(DZD bn) Share^1
EBITDA 260,725 289,764 (10.0%) ARPU (USD)^2 8.3 9.9 (16.2%)
EBITDA 21.2 20.9 1.4% ARPU (DZD)^2 668 715 (6.5%)
EBITDA 58.3% 59.5% 1.2 MOU^2 258 286 (9.8%)
Capex (USD 6,125 4,983 22.9% Churn^2 6.8% 5.5% 1.3
Orascom Telecom Algeria S.p.A ("OTA" or "the company") operates a GSM network
in Algeria and provides a range of prepaid and postpaid products encompassing
voice, data and multimedia, using the corporate brand "Orascom Telecom
Algerie" and the dual commercial brand of "Djezzy" and "Allo". OTA is focusing
on maintaining value through key strategic pillars. These strategic pillars
are oriented towards value segmentation, distribution control, operational
excellence, new revenue streams and assets monetization, control of regulatory
risks, and finally retaining key staff members as well as introducing new
talent development programs.
During the third quarter of 2012, OTA continued to face various challenges due
to actions from a number of government authorities. In particular, the Bank of
Algeria in our view issued an unfounded decision in the second quarter of
2010, instructing banks not to process any overseas foreign currency transfers
by OTA, leading to very negative effects on OTA's network and reputation.
Nevertheless, the company maintained its market leadership position with a
market share of 56%, controlling the largest distribution across all 48
provinces (Wilayas) and operating the largest network with 6,836 sites by the
end of this quarter.
OTA launched several promotions during Ramadan targeting its key customers.
These promotions included the "Liberty Ramadan du shour au ftour" for all of
Djezzy Carte's customer base, the "50% Bonus" for the entire Allo customer
base, and a generous Ramadan option of additional 100 minutes when consuming
DZD 100 or additional 700 minutes when consuming DZD 700 for the postpaid
customers. All Ramadan promotion benefits were during off-peak hours in order
to adjust to current network constraints on usage capacity. Smartphones were
offered at a very competitive price, where handsets were sold with no subsidy
and at a low price depending on the volume purchased. The VAS activity
distinguished itself on the marketplace through the launch of "Scoop Dine",
the content service platform of OTA with specific religious content for
Ramadan. Other VAS services specific to the period were "SMS boukala" and "SMS
joke". Pilgrims heading to Mecca were offered competitive roaming tariffs,
through an agreement with Zain, which was also strongly communicated during
the period. Several events for VIP customers and partners were organized all
over Algeria including a Ramadan tent for 2,000 people in Algiers and Oran,
featuring well-known artists.
On the sales side, OTA continued to sell its mobile telecommunication services
through indirect channels (distributors) and through the 87 owned "Djezzy"
branded shops. The nine exclusive national distributors cover all the 48
Wilayas and are distributing OTA's products through 19,000 authorized points
of sales. From July 5^th to July 19^th OTA launched a large campaign devoted
to the 50^th anniversary of Algerian independence. A film was produced and all
billboards were devoted to this campaign.
Djezzy's revenues increased by 2% YoY in local currency terms, in line with
the recovery trend seen in previous quarters. EBITDA increased 1% in local
currency terms, while subscribers reached 17.7 million, showing a growth of
approximately 9% YoY. The inability to carry out maintenance and expansion
works and to secure essential goods and services for the network represent a
key source of high operational uncertainty for the months to come.
1. Market share is calculated according to our data warehouse
2. Figures for three month period.
3-2 Mobilink, Pakistan
Table 12: Mobilink key indicators
Revenues 269,415 281,491 (4.3%) Subscribers 36,073,988 33,415,696 8.0%
Revenues 25.5 24.4 4.5% Market 30.1% 30.7% (0.6)
(PKR bn) Share^1
EBITDA 115,783 116,453 (0.6%) ARPU (USD)^2 2.4 2.7 (11.1%)
EBITDA 11.0 10.0 10.0% ARPU (PKR)^2 231 236 (2.1%)
EBITDA 43.0% 41.4% 1.6 MOU^2 212 197 7.8%
Capex (USD 28,447 54,503 (47.8%) Churn^2 7.1% 8.8% (1.7)
Pakistan Mobile Company Limited (PMCL) operates under the brand "Mobilink" and
has established itself as a market leader amongst Pakistan's GSM network
operators, providing prepaid and postpaid voice and data services to
individuals and corporate clients across Pakistan. Mobilink is steadfast and
focused on retaining and strengthening its market share to achieve revenue
growth, whilst continuing to reduce operational costs.
The pattern of increased industry competitiveness continued during the third
quarter of 2012, as the industry faced pressure on subscriber base and
revenues due to seasonality. Monsoon floods in the central and southern
regions hit the country for the third year in a row. All the operators moved
to compete for gaining revenue and subscriber share with multiple offers
during the quarter. This quarter all cellular networks were closed in major
cities on 20^th August (Feast day) and 21^st September, resulting in revenue
loss for all cellular operators.
During the third quarter of 2012, Mobilink also maintained its focus on voice,
data, VAS and customer acquisition offers along with brand building
activities. A brand campaign was launched highlighting core functional pillars
of the Mobilink brand: network coverage, customer service, mobile internet
speed, best rates and unmatched offers. Mobilink continued to provide an
unrivaled mobile internet browsing experience in terms of convenience and
speed. An unlimited weekly GPRS bundle was introduced to cater to the needs of
prepaid customers. The new weekly bundle offers a blend of speed and volume,
allowing customers to browse the web, stream content and check emails all week
long. Another data bundle was launched in August, offering customers unlimited
browsing during Feast holiday. Earlier, a hybrid bundle promotion was launched
during Ramadan offering a bouquet of data, minutes and SMS.
Mobilink Jazz continued to strengthen its portfolio of voice offers to
increase customers' engagement and acquisition by launching multiple
nationwide and location based offers. A 'Bonus on Usage' promotion was
launched offering bonus minutes and SMS on a daily basis after surpassing the
daily threshold. Subscriber acquisition and reactivation promotions, offering
hybrid products as incentive, continued during the quarter to grow the
On the VAS side, multiple usage based products were launched, including
Mobitunes, Song Dedication and Ladies Line products along with offers on
Cricket Updates and Hajj Portal. Round eight of Jazz SMS Khazana was also
launched during 3Q 2012 offering valuable prizes to customers by answering
interesting quiz questions, and was well received by Mobilink customers.
1. Market share, as announced by the Regulator in Pakistan is based on
information disclosed by the other operators which use different subscriber
recognition policies. As of this release, market share for September had not
been disclosed by the regulator. The above figure reflects market share as of
31 May 2012.
2. Figures for three month period.
Mobilink's revenues amounted to PKR 25 billion for the third quarter of 2012,
an increase of 4% YoY. While EBITDA reached approximately PKR 11 billion, a
10% increase YoY, translating into an improved EBITDA margin of 43.0%. Capex
declined by 48% to USD 28 million, in comparison to the intensive network
expansion and maintenance that took place during 2011. The subscriber base
also exhibited growth of 8%, reaching over 36 million customers.
3-3 banglalink, Bangladesh
Table 13: bangalink key indicators
Revenues 144,459 129,306 11.7% Subscribers 26,775,921 22,139,953 20.9%
Revenues 11.8 9.6 22.9% Market 27.5% 27.2% 0.3
(BDT bn) Share^1
EBITDA (USD 42,433 44,401 (4.4%) ARPU (USD)^2 1.8 1.9 (5.3%)
EBITDA (BDT 3.5 3.2 9.4% ARPU (BDT)^2 149 147 1.4%
EBITDA 29.4% 34.3% (4.9) MOU^2 225 214 4.8%
Capex (USD 19,689 63,934 (69.2%) Churn^2 6.6% 4.2% 2.4
Orascom Telecom Bangladesh ("OTB") provides its services under two brand
names: "banglalink" and "Icon". OTB's marketing strategy is oriented towards
targeting different consumer segments with tailored products and services to
cater for the needs of these segments.
The 2G licenses for banglalink and 3 other operators were renewed for 15 years
effective from November 11, 2011. banglalink will incur approximately US$ 256
million for the license renewal, of which 70.65% has already been paid. The
regulator has enforced the implementation of 10 second pulse for all packages
including interactive voice responsive (IVR) services effective September
The government has envisioned auctioning 3G licenses by the first quarter of
2013. According to the Draft 3G Licensing Guidelines, the licenses will be
provided to a total number of 5 licensees one of which will be allotted to
state-owned Teletalk by default. Another four licenses will be auctioned, of
them, 3 to be auctioned amongst the existing mobile operators, while 1 license
will be awarded to a possible new entrant. The government has given permission
to state owned operator Teletalk for a pilot launch of 3G service. The
government also invited applications for VoIP License. The regulator issued
draft regulatory and operational instruction for an unlicensed Wi-Fi band.
Until a Wi-Fi guideline is finalized, mobile operators have been asked to
offer Wi-Fi services only in collaboration with a local ISP.
During the third quarter of 2012, banglalink continued to launch attractive
services and offers to the market promoting voice, VAS and data. banglalink
launched a new package with data and SMS in start-up offer, loyalty programs,
bonus on recharge, as well as a reactivation promotion offering lucrative
tariffs. Segment specific new offers have been introduced for SME,
professionals and high value customers. banglalink partnered with bKash - the
largest m-commerce service provider in the country, to enable bKash wallet for
banglalink subscribers. Moreover, banglalink introduced agro news service for
the farmers - the biggest community of the country.
banglalink's revenues increased 23% in local currency terms, amounting to BDT
11.8 billion. banglalink achieved an EBITDA of BDT 3.5 billion for the third
quarter of 2012, an increase of 9% in comparison to the previous year. EBITDA
margin decreased to 29.4% from 34.3% in the previous year, mainly due to a
higher subscriber acquisition cost. The higher acquisition cost in 3Q 2012
resulted from the regulator's decision to implement a post-activation process
for new connection sales from October 2012, which prompted the distribution
channel to sell more connections in anticipation of the lower sales in the
1. Market share, as announced by the Regulator in Bangladesh is based on
information disclosed by the other operators which use different subscriber
2. Figures for three month period.
3-4 Wind Mobile, Canada
Table 14: Wind Mobile key indicators^1
Subscribers 510,484 357,983 42.6%
ARPU (USD)^2 28.0 25.90 8.1%
ARPU (CAD)^2 27.9 27.10 3.0%
Globalive Wireless Management Corporation ("The company" or "Wind Mobile"),
operates its wireless business under the brand name "Wind Mobile", a Canadian
wireless operation jointly owned by AAL Holdings Corporation and OTH. During
the third quarter of 2012,Wind Mobile continued its "Value Plus" strategy
execution, adding primarily postpaid subscribers while carefully managing
prepaid economics for both voice and mobile broadband customers.
Wind Mobile crossed the 500,000 customer milestone in September becoming the
fastest growing new entrant wireless operator on record in the Canadian
market. The company added 53,602 subscribers during the quarter increasing its
active subscriber base to 510,484, where over 90% of net additions during the
quarter were postpaid subscribers.
On the commercial side, the company enjoyed a strong back to school season. A
new, vibrant media campaign and promotional offers were launched to support
the important selling season. With respect to handsets, the strength of the
Samsung Galaxy SIII continuedthroughout the quarter. In addition, Wind Mobile
continued to add to its high-end Android devices with the introduction of the
Motorola Razr V, the Huawei Ascend P1, the HTC One-S and the BlackBerry 9320.
The company continued to expand its network and launched in Barrie and
Woodstock during the third quarter of 2012, increasing population coverage to
over 13.6 million. Wind Mobile continues to focus on improving network quality
and increased sites on air to 1,270 sites.
Wind Mobile continued to grow its distribution footprint and branded points of
sale increased to 265 at the end of the quarter.
1. Wind Canada is consolidated according to equity method.
2. Figures for three month period.
3-5 Telecel Globe, Sub-Saharan Africa
Table 14: Telecel Globe key indicators
Subscribers^1 4,230,847 2,825,056 49.8%
Revenues^2 (USD 000) 22,555 21,340 5.7%
EBITDA^2 (USD 000) 10,756 7,009 53.5%
EBITDA Margin 47.7% 32.8% 14.8
Capex^2 (USD m) 0.9 4.6 (80.0%)
Telecel Globe, a wholly owned subsidiary of Orascom Telecom Holding, launched
its operations in February 2008. It is an international telecommunications
company that manages GSM operators in small and medium sized countries in
Sub-Saharan Africa with high growth potential. It currently manages three GSM
networks in Burundi, the Central African Republic and Zimbabwe.
We are currently performing a strategic review and valuation assessment of
Telecel Globe operations to identify, examine and consider a range of
strategic alternatives. Those strategic options include, but are not limited
to, a sale of all or a material part of the Sub-Saharan African Operations
either in one transaction or in a series of transactions.
Telecel Globe's revenues amounted to USD 22 million for the third quarter of
2012, an increase of 6% YoY. EBITDA reached approximately USD 11 million, a
54% increase YoY, translating into an improved EBITDA margin of 47.7%.
Subscribers increased by almost 50% YoY, driven by a 92% increase in
Zimbabwe's subscriber base, leading to a combined Telecel Globe subscriber
base of over 4 million by the end of the third quarter of 2012.
1. Including Zimbabwe
2. Revenue, EBITDA and Capex figures are for the Central African Republic and
Burundi, as Zimbabwe is not consolidated. As per IFRS, 3Q 2011 figures have
not been restated to reflect the disposal of Namibia in 2011.
4. Financial Statements (IFRS)
Revenues 884,714 925,453 (4%) 2,718,422 2,739,867 (1%)
Other Income 7,396 5,912 17,871 20,973
Total Expense (466,635) (483,237) (1,406,893) (1,460,586)
Net unusual Items 2 47 (245) 47
EBITDA^1 425,477 448,175 (5%) 1,329,155 1,300,301 2%
Depreciation & (183,400) (197,423) (530,836) (582,118)
Impairment of (3,297) (1,258) (5,290) (3,504)
Gain (Loss) on
Disposal of (1,810) 478 (5,140) 58,445
Operating Income 236,970 249,972 (5%) 787,889 773,124 2%
Financial Expense (118,206) (88,841) (333,132) (443,325)
Financial Income 20,067 19,510 55,657 60,410
Foreign Exchange Gain 71,662^2 (110,299) 15,332 (99,866)
Net Financing Cost (26,477) (179,630) (262,143) (482,781)
Share of Profit (Loss) (27,497) (29,738) (77,045) (83,585)
Profit Before Tax 182,996 40,604 n.m. 448,701 206,758 117%
Income Tax (72,326) (45,393) (185,555) (137,130)
Profit from Continuing 110,670 (4,789) n.m. 263,146 69,628 n.m.
Gains or losses from
discontinued - 14,481^3 - 714,193^4
Profit for the Period 110,670 9,692 n.m. 263,146 783,821 (66%)
Equity Holders of the 106,279 (1,538) n.m. 249,435 752,764 (67%)
Earnings Per Share 0.14 0.72 (81%) 0.24 0.72 (67%)
Minority Interest 4,391 11,230 13,711 31,057
Net Income 110,670 9,692 n.m. 263,146 783,821 (66%)
1. Management presentation developed from IFRS financials.
2. Mainly due to the appreciation of CAD against EGP, resulting in an
unrealized FX gain related to the financial receivable from OTHC.
3. Reflects the effect of the spun off assets.
4. On 4 January 2011, OTH sold its entire shareholding in Orascom Tunisia
Holding and Carthage Consortium through which OTH owned 50% of Orascom Telecom
Tunisia ("OTT"). The figure also includes the effect of the spun-off assets.
5. Equates to net income after minority interest.
6. Based on a weighted average for the outstanding number of GDRs of
1,049,138,124 for 3Q 2012 and 9M 2012, and 1,046,278,130 GDRs for 3Q 2011, and
1,046,136,182 GDRs for 9M 2011.
Property and Equipment (net) 2,505,982 2,901,831
Intangible Assets 1,465,996 1,557,590
Other Non-Current Assets 1,252,840 1,089,077
Total Non-Current Assets 5,224,818 5,548,498
Cash and Cash Equivalents 1,687,296 1,013,543
Trade Receivables 305,494 205,195
Other Current Assets 1,117,961 1,186,206
Total Current Assets 3,110,751 2,404,944
Total Assets 8,335,569 7,953,442
Equity Attributable to Equity Holders of the Company 1,965,488 1,854,630
Minority Share 68,606 56,729
Total Equity 2,034,094 1,911,359
Long Term Debt 4,141,524 3,492,164
Other Non-Current Liabilities 217,880 255,159
Total Non-Current Liabilities 4,359,404 3,747,323
Short Term Debt 526,392 543,826
Trade Payables 613,812 738,289
Other Current Liabilities 801,867 1,012,645
Total Current Liabilities 1,942,071 2,294,760
Total Liabilities 6,301,475 6,042,083
Total Liabilities and Shareholder's Equity 8,335,569 7,953,442
Net Debt^1 2,980,620 3,022,447
1. Net debt is calculated as a sum of short term debt, long term debt, less
cash and cash equivalents.
Cash Flow Statement
Cash Flows from Operating Activities
Profit for the Period 263,146 69,629
Depreciation, Amortization & Impairment of Non-Current 536,126 585,622
Income Tax Expense 185,555 137,130
Net Financial Charges 262,143 482,781
Share of Loss (Profit) of Associates Accounted for Using 77,045 83,585
the Equity Method
Other 18,659 (43,198)
Changes in Assets Carried as Working Capital (184,721) (393,994)
Changes in Other Liabilities Carried as Working Capital 29,675 111,200
Income Tax Paid (376,370) (146,783)
Interest Expense Paid (86,105) (182,916)
Net Cash Generated by Operating Activities 725,153 703,056
Cash Flows from Investing Activities
Cash Outflow for Investments in Property & Equipment,
Intangible Assets, and Financial Assets & Consolidated (325,807) (358,155)
Proceeds from Disposal of Property & Equipment, (47,504) 24,349
Subsidiaries and Financial Assets
Advances & Loans made to Associates & other parties (149,350) (126,103)
Dividends & Interest Received 8,020 84,557
Net Cash Used in Investing Activities (514,641) (375,352)
Cash Flows from Financing Activities
Proceeds from loans, banks' facilities and bonds 1,060,432 332,151
Payments for loans, banks' facilities and bonds (649,375) (1,461,202)
Net Payments from financial liabilities (1,207) (7,607)
Net Change in Cash Collateral 121,786 (2,652)
Net Cash generated by Financing Activities 531,636 (1,139,310)
Net cash generated by operating activities - 87,696
Net cash (used in) generated by investing activities - 1,068,607
Net cash (used in) generated by financing activities - (5,256)
Net cash generated from discontinued operations - 1,151,047
Net Increase in Cash & Cash Equivalents 742,148 339,441
Effect of Exchange Rate Changes on Cash & Cash (68,395) (10,828)
Cash & Cash Equivalents at the Beginning of the Period 1,013,543 824,087
Cash & Cash Equivalents at the End of the Period 1,687,296 1,152,700
Foreign Exchange rates applied to the Financial Statements
Income Statement^1 5.9306 6.0398 6.0532 1.8 0.2
Balance Sheet^2 5.9658 6.0609 6.0989 2.2 0.6
Income Statement^1 72.5542 75.5571 77.3133 4.1 2.3
Balance Sheet^2 74.1680 79.0256 79.4242 7.1 0.5
Income Statement^1 85.8751 91.3715 92.4284 6.4 1.2
Balance Sheet^2 87.4806 94.5800 94.8337 8.4 0.3
Income Statement^1 73.1028 82.3045 82.0916 12.6 (0.3)
Balance Sheet^2 75.1685 81.8150 81.6400 8.6 (0.2)
Income Statement^1 0.9778 1.0058 1.0024 2.9 (0.3)
Balance Sheet^2 1.0446 1.0166 0.9837 (5.8) (3.2)
1. Represents the average monthly exchange rate from the start of the year
until the end of the period.
2. Represents the spot exchange rate at the end of the period.
3. Appreciation / (Depreciation) of US dollars in comparison to local
Ownership structure and consolidation methods
IWCPL (Pakistan) 100.00% 100.00% Full Consolidation Full Consolidation
Orascom Telecom 96.81% 96.81% Full Consolidation Full Consolidation
Telecel (Africa) 100.00% 100.00% Full Consolidation Full Consolidation
Telecel Globe 100.00% 100.00% Full Consolidation Full Consolidation
OT Ventures^2 100.00% 100.00% Full Consolidation Full Consolidation
Ring 99.00% 99.00% Full Consolidation Full Consolidation
OTCS 100.00% 100.00% Full Consolidation Full Consolidation
OT ESOP 100.00% 100.00% Full Consolidation Full Consolidation
Moga Holding 100.00% 100.00% Full Consolidation Full Consolidation
Oratel 100.00% 100.00% Full Consolidation Full Consolidation
C.A.T.^3 50.00% 50.00% Proportionate Proportionate
OT WIMAX 100.00% 100.00% Full Consolidation Divested
OT Holding 100.00% 100.00% Full Consolidation Full Consolidation
FPPL 100.00% 100.00% Full Consolidation Full Consolidation
OIH^4 100.00% 100.00% Full Consolidation Full Consolidation
OTFCSA 100.00% 100.00% Full Consolidation Full Consolidation
OT Holding 100.00% 100.00% Full Consolidation Full Consolidation
ITCL 50.00% 50.00% Proportionate Proportionate
SAWLTD 100.00% 100.00% Full Consolidation Full Consolidation
OT_OSCAR 100.00% 100.00% Full Consolidation Full Consolidation
TMGL 100.00% 100.00% Full Consolidation Full Consolidation
OTO 100.00% 100.00% Full Consolidation Full Consolidation
Waselabank 100.00% 100.00% Full Consolidation Full Consolidation
CORTEX 100.00% 100.00% Full Consolidation Full Consolidation
1. Direct and Indirect stake through Moga Holding Ltd. and Oratel.
2. OT Ventures owns 100% of Sheba Telecom which operates under the trade name
3. Direct and indirect stake through International Telecommunications
Consortium Limited (ITCL).
4. OIH owns 100% of Orascom Telecom Iraq, which sold Iraqna in December 2007.
5. The holding company for OTH's Share in OTHC, which has been accounted for
under the equity method.
Glossary of terms
Average Revenue per User ("ARPU"):Average monthly recurrent revenue per
customer (excluding visitors roaming revenue and connection fee). This
includes airtime revenue (national and international), as well as, monthly
subscription fee, SMS, GPRS & data revenue. Quarterly ARPU is calculated as an
average of the last three months.
Capital Expenditure ("Capex"): Tangible & Intangible fixed assets additions
during the reporting period, includes work in progress, network, IT, and other
tangible and intangible fixed assets additions but excludes license fees.
Churn: Disconnection rate. This is calculated as the number of disconnections
during a month divided by the average customer base for that month.
Churn Rule:A subscriber is considered churned (removed from the subscriber
base) if he exceeds the 90 days from the end of the validity period without
recharging. It is worth noting that the validity period is a function of the
scratch denomination. In cases where scratch cards have open validity, the
subscriber is considered churned in case he has not made a single billable
event in the last 90 days (i.e. outgoing or incoming call or sms, wap
session). Open cards validity is applied for OTA, Mobilink and Banglalink so
Minutes of Usage ("MOU"): Average airtime minutes per customer per month.
This includes billable national & international outgoing traffic originated by
subscribers (on-net, to land line & to other operators). Also, this includes
incoming traffic to subscribers from land line or other operators.
OTH's Market Share Calculation Method: The market share is calculated through
the data warehouse of OTH's subsidiaries. The number of SIM cards of
competitors that appeared in the call detail record of each of OTH's
subsidiaries is collected. This reflects the number of subscribers of the
competition. However, OTH deducts the number of SIM cards that did not appear
in the call detail records for the last 90 days to account for churn. The same
is applied to OTH subsidiaries. This method is used to calculate the market
shares of Djezzy. In Pakistan and Bangladesh, Market share as announced by the
Regulators is based on disclosed information by the other operators which may
use different subscriber recognition policy
Organic Growth forRevenue and EBITDA: Are non-IFRS financial measures that
reflect changes in Revenue and EBITDA excluding foreign currency movements and
other factors, such as business under liquidation, disposals, mergers and
acquisitions. We believe readers of this earnings release should consider
these measures as it is more indicative of the Group's ongoing performance.
Management uses these measures to evaluate the Group's operational results and
Investor Relations contacts
Tel: +202 2461 5120/21/22
Fax: +202 2461 5055/54
This presentation contains statements that could be construed as forward
looking. These statements appear in a number of places in this presentation
and include statements regarding the intent, belief or current expectations of
the subscriber base, estimates regarding future growth in the different
business lines and the global business, market share, financial results and
other aspects of the activity and situation relating to the company. Such
forward looking statements are no guarantees of future performance and involve
risks and uncertainties, and actual results may differ materially from those
in the forward looking statements as a result of various factors. You are
cautioned not to place undue reliance on those forward looking statements,
which speak only as of the date of this presentation, which is not intended to
reflect Orascom Telecom's business or acquisition strategy or the occurrence
of unanticipated events.
This information is provided by RNS
The company news service from the London Stock Exchange
QRTEAKFLFEFAFEF -0- Nov/14/2012 07:00 GMT
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