Telecom Egypt Quarterly Net Drops 25% on Wholesale Decline

Telecom Egypt Co. (ETEL), the Arab country’s monopoly fixed-line phone company, said second-quarter profit dropped 25 percent from a year earlier as it didn’t deliver any submarine cable projects.

Net income fell to 613 million pounds ($101 million) from 813 million pounds in the same period last year, the company said in a statement distributed by the Regulatory News Service. That missed the 786 million-pound average of four analyst estimates compiled by Bloomberg.

Wholesale-service revenue, the biggest contributer to the company’s income, was 1.24 billion pounds. The company didn’t give a comparative figure for last year, saying it declined because of “no new project deliveries during the period in the submarine cable projects business, a revenue stream which has always been uneven.”

Investment in infrastructure declined to 125 million pounds from 205 million a year earlier, leaving the company with 4 billion pounds of cash.

The results were “somewhat resilient” considering the political and economic unrest in Egypt, Shorouk Diab, telecommunications analyst at Cairo-based Pharos Holding, wrote in a research note. They are “largely demonstrating how the company’s fairly diverse business model has served to maintain overall performance in a tough operating environment.”

The shares dropped 1.6 percent, the most in almost a month, to 12.87 pounds at the close in Cairo. The stock has lost 2.6 percent this year compared with a 38 percent increase for the benchmark EGX 30 Index. (EGX30)

To contact the reporter on this story: Shaji Mathew in Dubai at

To contact the editor responsible for this story: Riad Hamade at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.