CAIRO: Egyptian mobile phone company Mobinil reported a second-quarter net loss as political turmoil following the toppling of President Hosni Mubarak hit tourism and other businesses.
The net loss of LE 108.5 million ($18.2 million) compared with a net profit of LE 378.7 million a year earlier.
"Mobinil has been actively seeking to reduce the impact of the exceptional first quarter and to cope with the continuous unstable political and economic environment," CEO Hassan Kabbani said in the company’ earnings statement on Tuesday.
Mobinil’s first-quarter profit was hit hard by Egypt’s political unrest, which froze business activity.
First-quarter net income tumbled 93.6 percent from a year earlier following the forced shutdown of several telecommunications services for several days during an 18-day political uprising.
Second-quarter revenue rose 3.5 percent from a year earlier to LE 2.6 billion, which the company said was related to the low level of revenue in the first quarter, mainly due to compensation to subscribers following service interruptions.
Mobinil said its subscriber base grew 0.6 percent from the preceding quarter to 30.54 million subscribers.
"Commercial activity started to pick up after a difficult first quarter," the company said.
Mobinil shares closed down 2 percent before the results were released. The main index EGX30 closed down 0.4 percent.
Traders said earlier in the day that Mobinil’s second-quarter earnings may be hit by a drop in subscribers because of a row over a cartoon posted by Naguib Sawiris, a politician and chairman of Orascom Telecom (ORTE.CA: Quote) which jointly owns Mobinil with France Telecom.
Some people considered the cartoon to be offensive to Islam, prompting some Muslims to call for a boycott of Mobinil and other businesses linked to Sawiris.
Earlier this month, UBS cut its price target on Mobinil shares by 24 percent, citing reduced business activity for the company due to the country’s political turmoil.
Mobinil’s earnings before interest, taxes, depreciation and amortisation fell 13.1 percent LE 952.6 million in the second quarter from the year-earlier period.
Blended Average Revenue Per User (ARPU) dropped 15.6 percent year-on-year to 27 pounds.
