Egyptian mobile phone company Mobinil made first-quarter net profit of LE 357 million ($64 million), down 2 percent from a restated figure from a year earlier and far below analysts’ forecasts.
The firm said on Monday it added 767,000 subscribers in the quarter for a total of 26.12 million by end-March, and that average revenue per user (ARPU) had fallen 18 percent on a year earlier to LE 32 per month.
"Their subscriber numbers were pretty much in line but their ARPUs were again hit quite badly," said Mike Millar from Naeem Holding. "The margins have slipped quite significantly."
Earnings before interest, taxation, depreciation and amortization (EBITDA) was LE 1.02 billion. The firm’s EBITDA margin shrank to 40.1 percent, from 46.4 percent a year ago.
"The results are disappointing," HC Securities analyst Nemat Choucri said.
"They look very, very weak numbers indeed," Naeem’s Millar said. "I think it’s well below what the market was expecting."
Mobinil, which leads Egypt’s competitive mobile market by subscribers, said its revenue was LE 2.55 billion, versus LE 2.49 billion in quarter one of 2009.
Six analysts polled by Reuters had seen revenue in a range between LE 2.63 billion and LE 2.93 billion. Their average forecast for net profit was LE 518 million, with the lowest estimate LE 409 million.
The firm revised down the comparative net profit and EBITDA figures from the first quarter of 2009, reversing provisioning amounting to LE 58 million in that quarter.
Without the revisions, net profit and EBITDA would have dipped more than 15 percent below the 2009 figures.
"As expected 2010 is the year of reaching a high level of maturity in the Egyptian mobile market," Hassan Kabbani, Mobinil’s chief executive, said in the earnings release. "The first quarter was affected by the economic slowdown, adverse regulatory conditions and intense competition pressuring down prices," he said.
Mobinil is engaged in a fierce pricing war with the North African country’s two other operators, Vodafone Egypt and Etisalat Egypt.
Earlier this month, Mobinil co-owners Orascom Telecom and France Telecom said they had reached a broad deal to end their battle for control of the firm.