Mobinil's second-quarter net income slides 18% to $80.2m

Cairo: Mobinil, the largest mobile phone operator in Egypt by subscribers, reported an 18 per cent decline in net income in the second quarter of 2008 on Sunday to 425 million Egyptian pounds ($80.2 million).

Average revenue per user (ARPU) declined in the quarter, to 47 pounds a month from 59 pounds last year, as the company expanded its customer base into lower-income groups. But the ARPU was unchanged from the first quarter.

The number of subscribers rose to 17.5 million in June, a 47 per cent increase on the same time last year, Mobinil said.

Marise Ananian, analyst at investment bank EFG-Hermes, said the ARPU performance was better than expected after Mobinil cut tariffs in April for on-net calls by between 30 and 50 per cent. "We had expected a decline in ARPUs in the short term. But the positive elasticity came earlier than expected," she added.

EFG-Hermes had expected a decline to 44.7 pounds a month from the first quarter to the second quarter, she said

Mobinil made a one-off gain of 54 million pounds in the second quarter when it won a tax dispute with the Egyptian authorities, Ananian said.

The company said earnings before interest, taxation, depreciation and amortisation (Ebitda) rose 8.5 per cent in the second quarter to 1.062 billion pounds, compared with 2007. Global revenue was also higher, at 2.441 billion pounds compared with 2.083 billion in the same period of 2007.

EFG-Hermes had predicted Mobinil's second-quarter net income would fall to 394 million pounds. HC Securities had forecast net income at 477 million pounds.