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Orascom Telecom dramas overshadow earnings forecast

Orascom Telecom dramas overshadow earnings forecast

CAIRO – Orascom Telecom, the Middle East’s largest mobile operator by subscribers, is in focus as it seeks to offload certain African assets and after ending an ownership row over Egypt’s Mobinil.

The firm, which had a US$46,4 million loss in the previous quarter, is seen posting a profit of US$75,9 million, according to five analysts polled by Reuters. Six analysts saw revenue at US$1,24 billion and Ebitda at US$510,5 million.’We expect a marginal decline at (Algerian unit) Djezzy while we expect a modest growth in all other units over first quarter 2009 figures,’ Nomura analyst Martin Mabbutt said, adding that he saw Orascom adding more than two million subscribers to reach 94,9 million.Orascom blamed its fourth quarter loss on riots in Algeria that damaged Orascom property and wiped US$96 million off the bottom line.The regional telecom firm is on rocky ground in Algeria, where it disputes a tax bill. It is in talks with South Africa’s MTN to sell the unit, which accounted for more than a third of Orascom’s 2009 revenue, and some smaller assets, including Leo Namibia.But Algeria has since said it is ready to buy all of the unit, Djezzy, and is itself in direct talks with Orascom. That could threaten the broader MTN deal and result in a lower selling price.Orascom this quarter resolved another drama, reaching a peace pact with France Telecom over their shared ownership of Egypt’s Mobinil.The agreement means Orascom will alter the way it accounts for Mobinil, clipping revenue but leaving its bottom line unaltered. The changes will not affect Orascom’s first quarter figures, but will likely be booked this year.The deal also gives the French firm more say in choosing Mobinil’s executives.Mobinil posted weak quarterly results last month on falling Arpu and tough competition in a maturing market.Three-quarters of Orascom’s 2009 revenue came from its operations in Algeria, Pakistan and Egypt.The firm also operates in Tunisia, Bangladesh, four sub-Saharan countries and North Korea, and has indirect equity ownership of a Canadian mobile start-up. – Nampa-Reuters

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