Orascom Telecom reports revenues of $3.47B for the first nine months of the year, an increase of 23% over September 2006

December 3, 2007

5 Min Read

CAIRO, Egypt -- Orascom Telecom Holding (OTH) (Ticker: ORTE.CA, ORTEq.L,ORAT EY, OTLD LI), announces its consolidated results for the third quarter 2007.

Highlights

Note:

OTH reports the results of operations of Iraqna (Iraq) as a discontinuedoperation due to the planned sale of the operation. In order to facilitate theanalysis of our results, all main indicators of Q3 2007 are being compared ona proforma basis to previous results excluding Iraqna. We have also providedthe proforma analysis with Iraqna and excluding Iraqna for 30 September2006 and Q2 2007 in appendix II.

  • Total subscribers reached approximately 65 million, an increase of 47%over September 2006 on a proforma basis.

  • Proportionate subscribers exceeded 53 million, an increase of 56% overSeptember 2006 on a proforma basis.

  • Revenues of US$ 3,470 million1 (LE 19,797 million) [for the first nine months], an increase of 23%over September 2006.

  • EBITDA reached US$ 1,490 million1 (LE 8,562 million)[for the first nine months], an increase of24% over September 2006.

  • Group EBITDA margin stood at 42.9%.GSM EBITDA2 margin stood at 49.3%. EBITDA margins of the majorsubsidiaries are: Djezzy 63.2%, Mobilink 43.3%, Mobinil 46.2%, andTunisiana 49.1%.

  • Net income for the period reached US$ 1,252 million1 (LE 7,199 million)an increase of 128% over September 2006.

  • Earnings per GDR reached US$ 5.96 (based on a weighted average forthe outstanding GDRs of 209.9 million over Q3 2007)3 vs. US$ 2.53 inSeptember 2006.

  • Net debt stood at US$ 4,268 million1 (LE 24,070 million) on 30 September2007. Net Debt/EBITDA4 for the period is 2.16



Operational Performance

During the third quarter of 2007, OTH continued to expand its subscriber base, addingapproximately 6 million subscribers (proforma based after excluding Iraqna), and reachedover 64.7 million subscribers, a 47% increase year-on-year. Mobilink’s subscriber basedreached over 28.5 million subscribers, adding over 2 million in one quarter, and Mobinil’ssubscriber base added over 1.8 million subscribers.OTH has increased its proportionate subscribers on a proforma bases to reach 53.5 million; a56% increase year-on-year.

With the continuous expansion in subscribers, ARPUs continued to decline year-on-year, butduring the quarter Arpus in Algeria and Bangladesh were flattened, and increased slightly inTunisia.

Capex continued to decrease in Algeria, Iraq and Tunisia, due to OTH”s continuous strategyto reduce capex per subscriber. In Egypt and Bangladesh, as a result of the aggressivesubscriber growth, capex continued to increase.

Orascom Telecom Share Buy Back Update

In October 2007, OTH announced that in total it holds 12,385,206 in equivalent GDRs dividedinto 11,612,970 GDRs on the London Stock Exchange and 3,861,180 local shares on theCairo & Alexandria Stock Exchange. OTH indicated that it will continue to evaluate selectiverepurchases of its shares in light of favorable relative market valuations. OTH has announcedanother potential buy back of equivalent to 5 million GDRs (3,614,794 net of the recentlypurchased shares relative to this program). To date OTH holds 12,385,206 in equivalentGDRs.

Orascom Telecom Completes the Sale of a 5% Stake in HTIL

In October and November 2007, OTH has sold 143,431,800 and 94,193,00 HutchisonTelecommunications International Ltd (“HTIL”) shares respectively, representingapproximately 5% of HTIL’s outstanding shares, at a price of HK$10.70 per share. Totalproceeds from the sale are HK$2.53 bn (US$327.4 mn).

This transaction brings OTH’s ownership in HTIL down to approximately 14.2%, and is in linewith its strategy to monetize part of its stake in HTIL while retaining its corporate governancerights and board seats (i.e. OTH to maintain a minimum of 12% stake into HTIL).

Orascom Telecom Announces the ICC’s Decision on Tunisiana

In November 2007, OTH announced that the International Court of Arbitration of theInternational Chamber of Commerce (the “ICC”) has issued its decision in the disputebetween OTH and National Mobile Telecommunications Company K.S.C. ("Wataniya") arisingout of the shareholders agreement, which governs their relationship in Orascom TelecomTunisie S.A. ("Tunisiana"), the Tunisian telecoms operator. The arbitration Tribunal hasdeclared that Wataniya was in breach of a material obligation under the ShareholdersAgreement in failing to respect OTH's right to propose a new Chairman of Tunisiana inOctober 2005. The Tribunal found that the appointment of Mr Houidi as Chairman ofTunisiana was null and void, and that OTH was correct to assert its right to replace Mr Houidiback in 2005. The Tribunal did not order Wataniya to transfer its shares in Tunisiana as aresult of this breach.

Reporting Iraqna Subsidiary as a Discontinued Operation

As a result of the company plan to sell Iraqna within one year and in order to comply withIFRS 5 "Non-current Assets Held for Sale and Discontinued Operations", OTH is reportingfrom Q3 2007 the results of Iraq operations as a separate line item in its ConsolidatedIncome Statement as 'net profit from discontinued operations (net of tax)' and the comparativeincome statement has been re-presented. Iraqna Assets and Liabilities are reported in aseparate line item in the Consolidated Balance Sheet as Assets/Liabilities classified as heldfor sale.

Orascom Telecom Announces the Sale of its Iraqi Mobile Operation "Iraqna

In December 2007, OTH announced that it has concluded a definitive agreement for the saleof 100% of the share capital of Iraqna Company for Mobile Phone Services Ltd. ("Iraqna") toMTC-Atheer, the Iraqi subsidiary of Mobile Telecommunications Company K.S.C. ("Zain"), fora consideration of US$ 1.2 billion (the “Transaction"). MTC-Atheer will pay 50% of theconsideration on the first anniversary of completion of the Transaction and after six months ofthe completion of the Transaction, will deliver a promissory note for the remaining 50% dueon the second anniversary. The payments are fully guaranteed by Zain. Completion of thetransaction is expected before the end of the year. As at September 30th 2007, OTH servedover 3 million active subscribers.

Orascom Telecom Launches Arbitration Against France Telecom

Orascom Telecom Holding S.A.E. (“OTH”) has commenced arbitration proceedings againstFrance Telecom (“FT”) before the International Court of Arbitration of the InternationalChamber of Commerce (the “ICC”). The arbitration concerns a dispute arising out of ashareholders’ agreement between OTH and FT dated 29 August 2001. OTH has filed severalclaims against FT and FT has filed several counterclaims against OTH. The parties have nowreached agreement upon the three-member arbitration tribunal that will hear and determinethe dispute.

Revenues

Revenues for the third quarter [first nine months] reached US$ 3,470 million (LE 19,796,842 million); a 23%increase year-on-year and a 5% increase over last quarter.

EBITDA

Consolidated EBITDA reached US$ 1,490 million (LE 8,562 million); a 24% increase year-onyearand 11% over last quarter. EBITDA margin reached 42.9%, GSM EBITDA reached 49.3%.

Net Income

Net Income for the period reached US$ 1,252 million (LE 7,199 million) a 128% increase yearon-year.

Orascom Telecom

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