Egyptian Company for Mobile Services (Mobinil) (EMOB.CA) Monday swung to a first-quarter net loss of 74 million Egyptian pounds ($12.3 million) on higher depreciation and amortization costs, but aims to boost its broadband subscriber base to offset local competition.
Mobinil booked a net profit of EGP23 million a year earlier, it said in an e-mailed statement.
Analysts at Cairo investment bank Beltone Financial forecast a EGP48 million net profit, while Naeem Brokerage estimated a EGP5 million profit.
“The high depreciation and amortization resulting from the partial swap of the network from [second generation] to [third generation] in a continuous effort to modernize the network continues to weigh on the net result,” Mobinil said in the statement.
Mobinil said it directed its efforts in the first quarter towards improving the quality of the subscriber base and boosting further data, value-added services and fixed and mobile broadband services.
Its total fixed broadband subscribers reached 418,000, a 19.4% year-on-year increase. Post-paid subscribers grew 15.9% year-on-year, “reflecting successful execution of targeted strategy,” Mobinil said. The total mobile-subscriber base stood at 32.6 million subscribers by the end of March, an 7.5% increase from the same period last year.
Mobinil has been hit over the past year by an erosion of revenue from its voice operations. Mobinil had been the market leader in terms of subscribers until 2009, but local rivals Vodafone Egypt and Emirates Telecommunications Co., or Etisalat, have been eating up its market share.
Mobinil Chief Executive Yves Gauthier told Zawya Dow Jones in December that he sees the company’s mission as becoming Egypt’s “main broadband operator,” rather than chasing market share at the lower end of the voice market, where the company has lost its role as market leader.
Meanwhile, Mobinil said that its outlook for 2012 is still subject to a number of uncertainties such as the difficult and volatile political climate that continues to heavily weigh on the economy and an unstable regulatory environment. However, achieving growth and improving margins are expected, it said–subject to stabilization of the general environment and the normalization of competition.
Blended average revenue per user, or ARPU, was EGP23.5 in the first quarter, compared with EGP25.1 a year earlier. First-quarter revenue increased 3.9% to EGP2.5 billion from the same period a year ago.
France Telecom, one of Mobinil’s shareholders, said last week that the Egyptian Financial Supervisory Authority (EFSA) has authorized its offer for a stake in Mobinil. The tender offer is part of a France Telecom effort to take control of the Egyptian operator in a deal worth about EUR1.5 billion.
Egypt Mobinil shares closed flat at EGP195.05.
