Market Insight

North Africa first-half 2012 results

August 14, 2012


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North Africa's most noteworthy telecoms operators have announced their results for the second-quarter/first half of 2012. Egypt's MobiNil, Vodafone Egypt and Telecom Egypt have each posted small revenue improvements for the quarter, as has Egypt-based Orascom. Morocco's Maroc Telecom meanwhile, has reported a slight revenue decrease during the period, due in the most part to a decline in operations in its domestic market.

  • Telecom Egypt: In the first half of 2012 Telecom Egypt generated revenues of EGP5.07 billion ($831.4 million), up from EGP5 billion a year earlier, equating to an increase of 1.4% year-on-year (y/y). Earnings before interest, taxes, depreciation and amortisation (EBITDA) were EGP2.29 billion, compared to EGP2.52 billion in the first half of 2011, down 9.3% y/y. The operator's EBITDA margin meanwhile fell from 36.4% to 33.3%. Net profit during the period was EGP1.53 billion, down 10.8% from EGP1.71 billion recorded in the same period a year earlier. Vodafone Egypt, in which Telecom Egypt has a 44.95% stake, generated revenues of EGP3.09 billion in its first-quarter ending June 2012, compared to EGP2.97 billion in the same period a year earlier; this equated to a y/y increase of 3.9%. Vodafone's net profit for the period was EGP521 million, up 0.5% y/y from EGP518. At the end of June 2012, its mobile subscriber-base meanwhile totalled 37.6 million, from 34.1 million at the end of June 2011, equating to an increase of 10.3% y/y.
  • MobiNil: The Egyptian Company for Mobile Services (MobiNil) has reported it achieved revenue of EGP5.08 billion ($835 million) in the first-half of 2012, compared to EGP5.05 billion in the first-half of 2011, equating to an increase of 0.8% y/y. In the first-half of 2012 profits were EGP3.7 billion, down 3.2% y/y.
  • Orascom Telecom: Egypt's Orascom has reported its revenue during the second quarter of 2012 amounted to $934.2 million, from $926.5 million recorded in the same quarter a year earlier, equating to an increase of 0.8% y/y. EBITDA were $469.8 million, up 6.8% y/y from $439.3 million, whilst its EBITDA margin increased from 47.4% to 50.5%. Net income for the quarter meanwhile stood at $31.7 million.
  • Maroc Telecom: Maroc Telecom has announced in the first-half of 2012 it generated revenues of MAD15.2 billion ($1.7 billion), down 1% y/y. EBITDA amounted to MAD8.4 billion, up 0.5% y/y; the EBITDA margin reached 55.1%, up 0.8 points from the first-half of 2011. Net income for the period was MAD3.1 billion, down 22% y/y due to restructuring provision and increased taxes in Morocco. The group's customer base reached 31.2 million, up 13.7% y/y thanks largely to its international growth.

At the end of June 2012, Telecom Egypt had 7.6 million fixed-line subscribers; of these, 2 million were double-play subscribers, whilst 1.2 million were ADSL (TE Data) subscribers, up 18.5% y/y. Growth of its broadband services is a key priority for Telecom Egypt; revenues generated from TE Data grew by 48% y/y thus meaning broadband now accounts for 28% of the operator's retail revenues. Growth of its broadband market has been important to the operator, given that it has seen a decline in its fixed-voice subscriptions, resulting in a 1.9% y/y loss in voice revenues.

The operator is investing in its network infrastructure; however its capital expenditure (capex) of EGP215.6 million in the first half of the year was 38.6% down on its capex for the first half of 2011. Egypt has continued to see political and social upheaval thus the operator's increased revenues and ADSL subscriber-base can be seen as positive. Telecom Egypt is keen for the NTRA to launch a tender for an MVNO licence, after it committed to do so earlier in the year. Vodafone Egypt, in which Telecom Egypt has a 45% stake, reported a mobile subscriber-base of 37.6 million, up 10.3% y/y, compared to MobiNil which had 33 million mobile subscriptions, up 8% y/y.

At the end of June 2012, Orascom's subscriber-base stood at 82.9 million, up 14.4% y/y after seeing positive growth in all of its markets. The operator's Algerian unit, Orascom Telecom Algerie (OTA), which uses the Djezzy brand, saw its subscriber-base increase to 17.7 million, up 11.2% y/y. However, OTA's performance has continued to face a number of challenges due to the actions of government bodies such as the Bank of Algeria, which has instructed banks not to process any foreign currency transfers by OTA, consequently negatively affecting its reputation and leading to its market share falling from 58.1% to 56.7%. Despite the difficulties it has faced, OTA only saw its revenues decrease by 1.4% y/y to $471 million. Orascom's stake in OTA has been questioned for some time; earlier in the year the Algerian government signed a non-binding Memorandum of Understanding (MOU) with the Orascom majority stake-holder Vimpelcom, to examine the sale of a stake in its Algerian unit, though the ownership dispute continues to drag on.

Orascom's Pakistan unit, Pakistan Mobile Company Limited (PMCL), which operates under the Mobilink brand, saw its subscriber-base increase by 7.7% to 36 million; despite this increase, the unit saw its mobile share decrease marginally, from 30.7% to 30.1%. Revenue for its Pakistan operations amounted to $295.2 million, up 1.2% y/y. Orascom Telecom Bangladesh (OTB), which operates under the Bangalink brand improved its subscriber-base by 26.2% y/y, from 20.2 million to 25.5 million at the end the quarter, increasing its market share to 27.2%. Bangalink's second-quarter revenue meanwhile, increased by 11.4% y/y to $142.1 million, thanks to its focus on the data market, which lead to a 98% increase in its monthly data revenue compared to December 2011.

Maroc Telecom's revenue decline can be attributed to a 5.3% y/y revenue decline in its Moroccan market, due to mobile price reductions of 28%, thus resulting in revenues of MAD11.9 billion being generated; down from MAD12.5 billion recorded a year earlier. In Morocco its subscriber-base reached 17.4 million, up 2.3% y/y, of which 1.4 million were 3G mobile internet users, equating to an increase of 70.6% y/y. The operator is keen to maintain its high 3G growth, whilst it also looks set to bid in the country's 4G licence tender later in the year. The company's revenue decline however, was offset by its growth in its international business; in the second-half of 2012 its international business generated revenues of MAD3.5 billion, up 20.9% y/y. This growth was made possible due to a subscriber increase of 39% y/y. Following the announcement of its results, Maroc Telecom has maintained its 2012 forecast of achieving earnings before interest, taxes and amortisation (EBITA) margin of 38%.

 

Geography
Egypt Morocco
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