Egypt's Orascom Telecom Holding reported Wednesday a
sharp jump in first-quarter earnings as it booked a hefty gain from the
sale of its Tunisian operations
OT, as the Arab world's biggest mobile-telephone operator by subscribers is known, reported net profit after minority interest of $813 million, well above $49 million a year earlier. Still, the result fell short of the $973 million net profit predicted by analysts at Cairo-based Beltone Financial.
OT shares closed down 1.4% Wednesday at EGP4.17.
The company said its earnings were buoyed by the sale in early January of its Tunisian operations, Orascom Tunisia Holding and Carthage Consortium, resulting in a gain of $754 million.
"The extreme situation in Algeria continues to hinder the growth for Djezzy; restrictions on foreign currency transfers, import bans and advertising bans on government-owned television have been countered to the extent possible by effective cost management in the Algerian business unit," OT said, referring to its Algerian subsidiary, called Djezzy. "Nevertheless, subscribers still witnessed an increase, capturing over 58% of the market in Algeria."
Orascom Telecom also said its subscriber base in the first quarter increased 16% over the same period last year, reaching more than 104 million customers.
Revenue for first quarter reached $949 million, up 5% over the same period of 2010 as a result of strong growth, Orascom said.
The company announced Wednesday it wouldn't pay a dividend because of a lack of revenue from several foreign businesses, including those in Pakistan, Bangladesh, Canada and Africa.
On Monday, Ahmed Abou Doma was appointed as OT's new CEO. Abou Doma was the head of Orascom's Bangladesh operations, the company's third-largest unit by revenue.
OT's board in April approved a move to nearly double its capital to 14 billion Egyptian pounds ($2.4 billion), from EGP7.5 billion, and to split the company.
It will divide into two companies: OT and Orascom Telecom Media and Technology Holding, or OTMT.
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