Mobinil, one of Egypt’s three mobile operators, recorded a decline in the amount of consolidated losses for the period ending 30 June 2015, representing the first half (H1) of the current year.
This marks a 73.6% decrease compared to 2014.
By the end of June 2015, losses amounted to EGP 91.1m ($11.7m) compared to the EGP 344.4m ($44m) registered losses by the end of the same period last year.
Meanwhile, the company’s revenues in the same period ending June 2015 reached approximately EGP 5.6bn, rising from the EGP 5.4 bn registered during the same period in the preceding year.
Standalone financial indicators for H1 of 2015 show that losses shrunk by 90.6%, reaching EGP 30m, instead of the EGP 336m that were registered the year before.
“Mobinil achieves strong profits, and operation costs are increasing at good rates. But debt interest paid by the company continuously diminishes these profits so that the company registers losses in the end,” Mobinil CEO Yves Gauthier had previously told Daily News Egypt.
The amount of interest paid by Mobinil is significant, which is the main reason behind the losses incurred over the past three years. The rates range from 12.5% to 13% of loans at a total value of approximately EGP 1bn per year, he mentioned.
Gauthier added that the company has accumulated loans worth EGP 8bn, and is undertaking a financial restructuring plan involving increasing capital, selling assets, and subsidising revenues to increase them.
In late February, Orascom Telecom Media and Technology (OTMT) SAE sold its stake and all voting rights in Mobinil to Orange SA. The remaining 5% of OTMT’s shares in Mobinil were transferred to Orange, whereby OTMT gave up its voting rights in the company, which were equal to 28.75%.
French telecommunications company Orange now holds a 99% stake in Mobinil. Gauthier, however, had mentioned that it is a temporary situation, as Orange has the intention to seek an Egyptian investor in Mobinil after the economy stabilises.