Egypt’s Mobinil Reports First-Quarter Loss on Network Swap

Egyptian Co. for Mobile Services, the country’s second-biggest mobile network operator, reported a first-quarter loss after costs rose as the company upgrades its network.

The net loss for the three months ended March 31 was 74 million Egyptian pounds ($12.2 million) after reporting a 23 million-pound profit in the same period last year, the Cairo- based company known as Mobinil said in an e-mailed statement today. The average of five analyst estimates compiled by Bloomberg was for a profit of 2 million pounds.

Mobinil, which may be acquired by France Telecom SA (FTE), said depreciation and amortization as a result of the partial upgrade of the company’s network to 3G from 2G swelled to 701 million pounds from 558 million pounds a year-earlier. Mobinil has reported a net loss in three of the last four quarters.

Revenue rose 3.9 percent to 2.53 billion pounds in the first quarter and subscribers grew 7.5 percent to 32.6 million, it said.

“The results signal that Mobinil’s recovery is underway and that the changes we have implemented to our business to recover from previous unfavorable conditions have started to pay off,” Yves Gauthier, the company’s chief executive officer, said in the statement.

Shares of Mobinil gained 0.2 percent to 195.2 pounds in Cairo, the highest level in two years.

To contact the reporter on this story: Ahmed A. Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Digby Lidstone at dlidstone@bloomberg.net

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