Orascom Telecom 1Q Profit Falls on One-Time Investment Gain
Orascom Telecom Holding SAE (ORTE), North Africa’s biggest mobile phone company, said its first-quarter profit fell 86 percent from a year earlier because of the gain it had realized from the sale of its Tunisian unit.
Net income for the period that ended March 31 was $115.7 million compared with $812.7 million a year earlier, the Cairo- based company said in an e-mailed statement today. It had recognized a gain of $754 million last year as a result of selling its stake in Orascom Tunisia Holding, it said.
Orascom, which split its assets this year to facilitate a $6.5 billion merger with Russia’s VimpelCom Ltd. (VIP), said its earnings before interest, taxes, depreciation and amortization increased 5 percent in the quarter to $433.5 million. The company’s Algerian unit Djezzy, its biggest revenue generator, contributed $273.8 million of that sum, also a 5 percent gain over last year, it said.
Orascom said last month it is filing for arbitration against the Algerian government for “unlawful actions taken since 2008” against Djezzy, including a $1.3 billion court- ordered fine for violating foreign exchange regulations. Algeria’s government is in talks with VimpelCom to buy Orascom’s majority stake in Djezzy, after the unit was valued at $6.5 billion, Algerian Post and Communications Minister Moussa Benhamadi said in April.
Shares of Orascom fell 0.3 percent to 3.37 Egyptian pounds at the 2:30 p.m. close in Cairo, valuing the company at 17.7 billion pounds ($2.9 billion). The stock has surged 95 percent this year, compared with a 40 percent increase for the benchmark EGX 30 Index. (EGX30)
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