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Egypt’s Global Telecom’s profit boosted by Algerian arm

Company’s shares edged 0.21% higher on Monday

Shares in Egypt’s Global Telecom Holding (GTH) rose on Monday as the company reported a rise in fourth quarter (Q4) 2018 earnings.

The company’s Q4 2018 net profit amounted to $98 million, compared to a loss of $136 million for Q4 2017.

GTH’s shares added 0.21 percent on Monday, and have gained 28.23 percent since the start of this year after being the worst-performing share on the EGX 30 index last year. (Read more)

Rami ElSirgany, a research analyst at Naeem Brokerage, described the company’s results in emailed comments to Zawya as “Overall, a good performance, led by Algerian subsidiary Djezzy (Omnium Telecom Algeria) closing the quarter with an EBITDA margin of 47.5 percent”, he said, explaining that the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 3.9 percent higher year-on-year and 2.3 percent quarter-on-quarter.

GTH is the former Orascom Telecom business that operates mobile networks in in Africa and Asia, including Algeria (Djezzy), and had more than 100 million customers globally in 2018.Global Telecom Holding is majority-owned by the VEON Group, one of the world’s largest mobile telecommunications provider by number of customers.

In January last year, the Egyptian government ordered the seizure of 990 million pounds it was owed from a disputed tax claim against GTH arising in 2016.

Veon had previously launched a bid to take the company private in November 2017 via a mandatory tender offer (MTO) for its remaining shares, but it let this offer expire in April last year, which sent the company’s shares into a downward spiral.

Veon had previously launched a bid to take the company private in November 2017 via a mandatory tender offer (MTO) for its remaining shares, but it let this offer expire in April last year, which sent the company’s shares into a downward spiral.

However, in February this year the company launched a new offer at 5.30 Egyptian pounds ($0.3005) per share for the 42.3 percent of Cairo-listed Global Telecom Holding it does not already own.

“Importantly, in context of parent VEON’s mandatory cash tender offer (MTO) of EGP5.3/share, we await to see through the financial statements (which are yet to be published), if there are any updates/revisions regarding the tax claims made by the Egyptian Tax Authority (ETA),” ElSirgany added.

“We reiterate that the FRA (Financial Regulatory Authority) approval of the MTO could be granted, depending partially on the outcomes of the tax claim settlement,” he said.

About Marc Mcilhone

Marc Mcilhone
Marc Mcilhone is ArabBrains' Editor - sourcing news and features content and overseeing the work of the site’s contributors. Marc’s work is informed by his technical background in architecture having worked for some of the UK’s leading practices on projects within the education, healthcare and housing sectors. Marc has a particular interest in how innovators are creating sustainable solutions that have a positive impact on people’s everyday lives. Please email press releases and news to: editor@arabbrains.com

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