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Telecom Egypt Profit Advances 23%, Beats Estimates

Aug. 12 (Bloomberg) -- Telecom Egypt, the North African country’s fixed-line monopoly, said second-quarter profit rose 23 percent, beating analyst estimates, as subscribers increased and margins widened.

Net income advanced to 971 million Egyptian pounds ($170.7 million) from 789 million pounds a year earlier, the Cairo-based company said in a statement distributed by the Regulatory News Service today. That beat the 789 million-pound median estimate of three analysts, compiled by Bloomberg News.

“We continue to capture growth in mobile and data markets,” Chief Executive Officer Tarek Tantawy said in the statement. “Net profit margins continue to expand over the period, as a result of cost control and our long-standing investment in Vodafone Egypt.

The net profit margin widened to 35.9 percent from 29.5 percent. Income from the state-owned company’s 44.95 percent stake in Vodafone Egypt was 730 million pounds in the first half of 2010.

“Telecom Egypt has been successful in managing the stiff competition it has been facing from mobile operators,” CI Capital said in a report today.

Second-quarter sales rose 1.1 percent to 2.71 billion pounds. The company added a net 64,574 broadband subscribers, compared with 25,613 a year earlier, for a total of 741,046. Fixed-line subscribers increased 110,000 in the quarter for a total of 9.4 million.

Vodafone Plc said on June 1 that it had ended talks to sell its stake in the Egyptian unit to Telecom Egypt. Telecom Egypt may seek investors to make a renewed bid for the stake, a person familiar with the talks said in June. Telecom Egypt CEO Tantawy has declined to comment.

Telecom Egypt shares were little changed at 17.13 pounds at 11:39 a.m. in Cairo trading today.

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net

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