Orascom Telecom Fourth Quarter ORASCOM TELECOM HOLDING Fourth Quarter 2012

Transcription

1 ORASCOM TELECOM HOLDING Fourth Quarter 2012 P a g e 1

2 Content 1. 4Q12 Highlights 2 2. Performance Review 3 3. OTH Operations 8 4. Financial Statements Appendix 17 P a g e 2

3 Cairo/London (March 6, 2013), Orascom Telecom Holding S.A.E. ( OTH, or the Group ) (EGX: ORTE.CA, ORAT EY. LSE: ORTEq.L, OTLD LI), a leading provider of mobile telecommunications in Africa, Asia and North America, announces its consolidated financial and operating results for the fourth quarter and full year ending December 31, 2012, demonstrating 9% subscribers growth, 11% revenue growth and 33% EBITDA growth on an organic basis year on year (YoY). 1. 4Q12 Highlights 1 Total subscribers reached 85 million, an increase of 9% YoY. Revenues reached USD 908 million, exhibiting an organic 2 growth of 11% YoY. EBITDA amounted to USD 425 million, showing an organic 2 growth of 33% YoY, driven by top line growth and operational excellence and cost saving initiatives, leading to profitable growth. The strong increase in EBITDA is also driven by the doubling in EBITDA of Bangladesh as a result of significantly lower commercial opex (SIM tax subsidy) in 4Q12, where in 4Q11 banglalink recorded high customer acquisition cost. Strong group EBITDA margin of 46.8%. EBITDA margins for the subsidiaries were as follows: Djezzy 59.0%, Mobilink 43.1%, banglalink 37.3%, and Telecel Globe 30.4%. Net income before minority interest stood at a loss of USD 469 million, mainly driven by the adverse impact of a non-cash impairment of OTH s shareholder loan due from Globalive Investment Holding Corp. by USD 339 million, tax charges, and foreign exchange losses. Operating income for the period stood at USD 232 million, increasing 56% YoY. Net debt 3 stood at USD 2,731 million, declining 10% YoY; Net Debt/EBITDA 4 of 1.6x as at December 31, Table 1: Group key indicators Thousands 4Q12 4Q11 Change Organic Growth FY12 FY11 Change Total subscribers 84,924 78, % 84,924 78, % Revenues (USD) 908, , % 11% 3,626,767 3,635,578 (0.2%) EBITDA (USD) 425, , % 33% 1,754,658 1,646, % EBITDA margin 46.8% 38.7% % 45.3% 3.1 Net income (USD) (468,896) (123,468) n.m. (205,760) 660,354 n.m. EPS (USD per GDR) (0.08) (0.02) n.m. (0.04) (0.13) n.m. Capex (USD) 187, ,869 (11.0%) 385, ,015 (20.8%) 1. Income Statement and Balance Sheet figures are in US dollars in accordance with the International Financial Reporting Standards (IFRS). 2. Organic growth for Revenue and EBITDA: non-ifrs financial measures that reflect changes in Revenue and EBITDA excluding foreign currency movements and other factors, which includes business under liquidation, disposals, mergers and acquisitions (Please refer to glossary of terms for the definition of organic growth ). 3. Net debt is calculated as a sum of short term debt, long term debt, less cash and cash equivalents. 4. Net Debt/EBITDA is calculated for the twelve months ending December 31, P a g e 2

4 Ahmed Abou Doma, Chief Executive Officer, commented on the results: We are delighted to announce the fourth quarter results. Our operations achieved healthy growth in local currency terms, yet continued to be affected by the fluctuation of local currencies against the US dollar, mainly in Algeria and Pakistan. EBITDA organic growth continued to surpass revenue organic growth, marking 33% and 11% respectively, driven by operational excellence initiatives across the board, leading to profitable growth. Our subscribers increased by 9% YoY to reach 85 million customers. We launched Mobile Financial Services (MFS) in Pakistan and Burundi, and also witnessed a growth of 85% YoY in MFS revenues in Bangladesh. We have concluded the selection process of network vendors for modernizing the network of Mobilink, paving the way to introducing 3G services, as soon as these are licensed in Pakistan. Growth in consolidated revenues resulted from strong subscriber growth and an increase in data and Value Added Services (VAS) uptake in our main subsidiaries, namely in Algeria, Pakistan and Bangladesh. EBITDA increased as a result of this growth and cost saving initiatives in our major subsidiaries. During the quarter, we announced our plans to acquire control of WIND Mobile Canada, through the conversion of our non-voting shares into voting shares, which would result in OTH s holding an indirect 65.1% voting and economic interest, subject to Canadian regulatory approvals. We also entered into an agreement to acquire the stake of Mr Anthony Lacavera in WIND Mobile Canada, subject to certain regulatory approvals, which would bring OTH s stake in WIND Mobile Canada to 99.3%. 2. Performance Review 2-1 Subscribers Table 2: Subscriber base Subsidiary 4Q12 4Q11 Change Djezzy, Algeria 17,845,669 16,595, % Mobilink, Pakistan 36,141,241 34,213, % banglalink, Bangladesh 25,882,698 23,753, % Sub-Saharan Africa 4,463,962 3,139, % Subtotal 84,333,570 77,702, % Operations consolidated under the equity method 4Q12 4Q11 Change Wind Canada, Canada 590, , % Total 84,924,008 78,104, % Total subscribers increased by 9% YoY nearing 85 million subscribers at the end of the quarter, driven by a steady increase in subscribers in our main operating countries, as well as good additions to our subscribers in Sub-Saharan Africa and Canada. In Algeria, Djezzy grew its subscriber base by 8% YoY, as a result of promotions and channel incentives aimed at animating the subscriber base. In Pakistan, despite the new regulatory restrictions on retail channel sales, Mobilink s subscribers increased by 6% YoY, as a result of churn management coupled with reactivation promotions. In Bangladesh, banglalink subscribers increased by 9% YoY, despite the implementation of a newly imposed post sales activation process and also the disconnection of high value suspected VoIP users, in compliance with new self-regulations set by BTRC. Telecel Globe subscribers increased 42% compared to the previous year, mainly driven by strong additions in Zimbabwe, where the number of subscribers increased by 70% YoY. In Canada, Wind Mobile grew its subscriber base by 47% YoY, through its continued focus on Value Plus attracting postpaid additions to the network. P a g e 3

5 2-2 Revenues Table 3: Revenues in US dollars Subsidiary/thousands 4Q12 4Q11 Change FY12 FY11 Change GSM Djezzy Algeria 466, , % 1,841,508 1,859,804 (1.0%) Mobilink, Pakistan 282, ,175 (1.0%) 1,132,917 1,133,704 (0.1%) banglalink, Bangladesh 138, , % 554, , % Telecel Globe, Africa 22,899 23,743 (3.6%) 90,732 93,683 1 (3.2%) Total GSM 909, , % 3,619,458 3,598, % Telecom Services Ring & Other 2 (1,013) 1,430 n.m. 7,309 37,096 (80.3%) Total Consolidated Revenues 908, , % 3,626,767 3,635,578 (0.2%) Table 4: Revenues in local currency Subsidiary/billions 4Q12 4Q11 Change FY12 FY11 Change GSM Djezzy, Algeria (DZD) % % Mobilink, Pakistan (PKR) % % banglalink, Bangladesh(BDT) % % Revenues for the fourth quarter were adversely affected by the local currency devaluation against the US dollar mainly in Algeria and Pakistan, leading to weaker US dollar performance compared to solid profitable growth in local currency terms. Revenues organic growth for the quarter was 11%. In Algeria, revenues increased by 9% YoY in local currency terms, while showing a 2% YoY increase in US dollar terms. Growth in revenues is mainly attributed to a larger subscriber base, a set of extra promotional incentives targeting the dormant customer base, and an airtime incentive that led to an increase in distributor purchases. In Pakistan, revenues increased by approximately 9% YoY in local currency terms, while the devaluation of the local currency against the US dollar led to a decline of 1% YoY. The increase in revenues is mainly driven by the focus on targeting voice, data, VAS and churn management. Nevertheless, revenues for the quarter were negatively affected by the government requested shut down of all cellular networks in major cities a few times due to security reasons. The networks were shut down during Eid holiday in October, Ashura and other occasions in November and December. In Bangladesh, revenues grew by 13% YoY in local currency terms, driven by a higher level of VAS and data adoption, and targeted start-up, as well as reactivation promotions. The disconnection of high value suspected VoIP users, in compliance with new self-regulations set by BTRC, adversely affected revenues and is expected to have a significant negative impact during Telecel Globe s revenues declined by 4% YoY, primarily due to lower revenues achieved during December 2012 compared to the same period last year, alongside the devaluation of local currencies against the US dollar in CAR and Burundi. However, revenues in local currency terms for FY 2012 increased by 12% and 29% in CAR and Burundi respectively. 1. As per IFRS, revenues for FY11 have not been restated to reflect the disposal of Powercom Ltd. Namibia. 2. Other includes an adjustment to non-gsm revenues by USD 1 million. P a g e 4

6 2-3 ARPU Table 5: Blended average revenue per user (USD) Subsidiary 4Q12 4Q11 Change Djezzy, Algeria (5.6%) Mobilink, Pakistan (7.4%) banglalink, Bangladesh (5.6%) Table 6: Blended average revenue per user in local currency Subsidiary 4Q12 4Q11 Change Djezzy, Algeria (DZD) % Mobilink, Pakistan (PKR) % banglalink, Bangladesh (BDT) (1.5%) In Algeria, ARPU remained stable in local currency terms, despite an increase in the multi-sim phenomenon, as well as the revision of the interconnect catalogue during July In Pakistan, ARPU increased by 3% in local currency terms, as a result of the introduction of new products and continued success of VAS. In Bangladesh, ARPU decreased by nearly 2% in local currency terms, as a result of lower minutes of usage (MOU) compared to the same period last year and the implementation of a 10 seconds pulse for all packages from September 2012 alongside the impact of disconnecting high value suspected VoIP users, in compliance with new self-regulations set by BTRC. P a g e 5

7 2-4 EBITDA 1 Table 7: EBITDA in US dollars Subsidiary/thousands 4Q12 4Q11 Change FY12 FY11 Change GSM Djezzy (Algeria) 274, , % 1,093,396 1,100,663 (0.7%) Mobilink (Pakistan) 121, , % 488, , % banglalink (Bangladesh) 51,543 24, % 192, , % Telecel Globe (Africa) 6,964 (5,291) n.m. 33,311 7,776 2 n.m. Total GSM 455, , % 1,807,127 1,740, % Ring 1,708 6,788 (74.8%) (4,784) (3,167) (51.1%) OT Holding & Other 3 (31,323) (65,574) 52.2% (47,685) (90,565) 47.3% Total Consolidated 425, , % 1,754,658 1,646, % Table 8: EBITDA in local currency Subsidiary/billions 4Q12 4Q11 Change FY12 FY11 Change GSM Djezzy, Algeria (DZD) % % Mobilink, Pakistan (PKR) % % banglalink, Bangladesh (BDT) % % Consolidated EBITDA for 4Q12 exhibited an organic growth of 33% YoY, driven by the on-going operational excellence initiatives such as indoor to outdoor swaps, increasing the percentage of site sharing, hybrid power solutions and call center outsourcing, all off which led to healthy profitable growth. In Algeria, EBITDA increased by 8% YoY in local currency terms, driven by growth in top line. In Pakistan, EBITDA grew by 12% YoY in local currency terms, exceeding revenue growth for the quarter, mostly on the back of strong measures of the operational excellence initiative. In Bangladesh, EBITDA doubled YoY in local currency terms, due to savings on commercial opex (SIM tax subsidy) resulting from lower gross additions for new sales, following the implementation of a newly imposed post sales activation process (registration of SIM cards prior to activation) by the regulator. In addition, EBITDA for 4Q11 in Bangladesh was adversely affected by the aggressive acquisition strategy that followed the reduction in SIM Tax in June 2011, which led to an adjustment in SIM tax subsidy allocation. Telecel Globe s EBITDA showed significant improvement YoY, due to cost optimization initiatives, reversing the losses seen in 4Q11 which were due to one-off cost. However, EBITDA for FY 2012 achieved a triple digit growth in CAR and Burundi in local currency terms. Group EBITDA margin for the fourth quarter of 2012 was 46.8%, supported by a solid GSM margin of 50.0%, positively impacted by margin improvements in Bangladesh. OT Holding and Other EBITDA improved by 52% YoY, as the comparative figure for 4Q11 was adversely affected by provisions for corporate contingent liabilities and costs associated with the demerger of OTMT. 1. EBITDA excludes management fees which were previously treated as a cost in each subsidiary and as a revenue for the holding company. 2. As per IFRS, revenues for FY11 have not been restated to reflect the disposal of Powercom Ltd, Namibia. 3. Other non-operating companies include: CAT, OTV, OIH, OTI M, Cortex, EUROASIA, FPPL, ITCL, IWCPL, Moga, Oratel, Swyer, OTHC, OTASIA, OSCAR, OTESOP, OT SARL, TMGL, TIL, TIL SA. P a g e 6

8 2-5 Net Income Net Income attributable to Equity Holders of the Parent amounted to a loss of USD 474 million for the quarter, mainly due to the adverse impact of a non-cash impairment of OTH s shareholder loan due from Globalive Investment Holding Corp., tax charges, and foreign exchange losses. The company booked an impairment of USD 339 million, following a detailed business plan review of our operations in Canada and an impairment test per cash generating unit. EPS for the three months ended December 31, 2012 amounted to USD (0.08)/GDR. 2-6 Capex Table 9: Capex in US dollars 1 Subsidiary/thousands 4Q12 4Q11 Change FY12 FY11 Change Djezzy (Algeria) 31,382 20, % 57,763 40, % Mobilink (Pakistan) 101, ,735 (7.9%) 184, ,259 (29.3%) banglalink (Bangladesh) 41,962 69,326 (39.5%) 125, ,746 (22.1%) Telecel Globe 13,340 11, % 18,368 25,000 (26.5%) Other (128) 2,000 n.m. 1,054 3,000 (64.9%) Total 187, ,869 (11.0%) 385, ,015 (20.8%) Consolidated Capex/Revenue 20.7% 23.5% (2.9) 10.6% 13.4% (2.8) Total Capex amounted to USD 188 million for 4Q12, decreasing by 11% YoY. In Algeria, Capex increased 51% YoY, due to higher administrative Capex. In Pakistan, Capex increased due to the commencement of network swap, closing the gap in comparison to last year s focus on network and IT development. In Bangladesh, Capex decreased 40% compared to last year s intensive customer acquisition and network roll-out. Capex for Telecel Globe remained low for the quarter. 2-7 Cash and Debt Net debt declined by 10% for the full year of 2012 to reach USD 2.73 billion in comparison to USD 3.02 billion as at 31 December 2011, leading to Net Debt/ EBITDA of 1.6x as of 31 December Capex excludes license fees. P a g e 7

9 3. OTH Operations The Group operates in seven countries with favourable dynamics in Africa, Asia and North America. It is worth highlighting that OTH serves a population of approximately 451 million people with an average mobile penetration rate of 56%. Operations owned by Orascom Telecom (OTH has 65% indirect economic ownership in Globalive Investment Holding Canada but a minority voting stake) ALGERIA Population: 37 million GDP Growth: 2.6 % GDP/Capita PPP ($): 7,500 Pop. Under 15 years: 28% Mobile Penetration: 87% BANGLADESH Population: 161 million GDP Growth: 6.1% GDP/Capita PPP ($): 2,000 Pop. Under 15 years: 34% Mobile Penetration: 60% PAKISTAN Population: 190 million GDP Growth: 3.7% GDP/Capita PPP ($): 2,900 Pop. Under 15 years: 35% Mobile Penetration: 64% BURUNDI Population: 10 million GDP Growth: 4.2% GDP/Capita PPP ($): 600 Pop. Under 15 years: 46% Mobile Penetration: 22% CENTRAL AFRICA REPUBLIC Population: 5 million GDP Growth: 4.1% GDP/Capita PPP ($): 800 Pop. Under 15 years: 41% Mobile Penetration: 20% CANADA Population: 34 million GDP Growth: 1.9% GDP/Capita PPP ($): 41,500 Pop. Under 15 years: 16% Mobile Penetration: 72% ZIMBABWE Population: 13 million GDP Growth: 5% GDP/Capita PPP ($): 500 Pop. Under 15 years: 41% Mobile Penetration: 69% Note: Figures from CIA Factbook. Mobile penetration is based on December 30, 2012 subscriber figures and market share. P a g e 8

10 3-1 Djezzy, Algeria Table 11: Djezzy key indicators Financial data 4Q12 4Q11 Change Operational data 4Q12 4Q11 Change Revenues (USD 000) 466, , % Subscribers 17,845,669 16,595, % Revenues (DZD bn) % Market Share % 55.5% (0.3) EBITDA (USD 000) 274, , % ARPU (USD) (5.6%) EBITDA (DZD bn) % ARPU (DZD) % EBITDA Margin 59.0% 58.6% 0.4 MOU (8.5%) Capex (USD 000) 31,382 20, % Churn 2 6.4% 5.5% 0.9 Orascom Telecom Algeria S.p.A ( OTA or the company ) operates a GSM network in Algeria and provides a range of prepaid and postpaid products encompassing voice, data and multimedia, using the corporate brand Orascom Telecom Algerie and the dual commercial brand of Djezzy and Allo. OTA is focusing on maintaining value through key strategic pillars. These strategic pillars are oriented towards value segmentation, distribution control, operational excellence, new revenue streams and assets monetization, control of regulatory risks, and finally retaining key staff members as well as introducing new talent development programs. OTA continued to face various challenges due to actions from a number of government authorities. In particular, the bank of Algeria in our view issued an unfounded decision during 2Q10, instructing banks not to process any overseas foreign currency transfers by OTA leading to a very negative impact on OTA s network and reputation. Nevertheless, the company maintained its leadership position with a market share of 55%. During 4Q12, OTA launched several promotions and channel incentives without creating peaks on the normal network utilization; with efforts on both postpaid and prepaid. On the postpaid side, Djezzy launched several communication campaigns to reinforce the awareness of postpaid and hybrid products; those communication campaigns were followed by a postpaid acquisition promotion offering a 50% discount on both the acquisition fee as well as on the first monthly fee. In the prepaid arena, OTA launched a 15 days promotion offering a 50% recharge bonus. On the sales side, OTA continued to sell its mobile telecommunication services through indirect channels (distributors) and through 87 owned Djezzy branded shops. The eight exclusive national distributors cover all 48 provinces (Wilayas) and are distributing OTA s products through 19,000 authorized points of sale (POS). During 4Q12, OTA obtained the regulator s approval to introduce a new SIM price, which will allow it to be more competitive in the Algerian market. Furthermore, a 21 days regional incentive, targeting only 8 provinces, due to actual network capacity constraints, was launched during October and November. OTA s VAS activity distinguished itself on the marketplace through the launch of Scoop Foot, info services regarding the three Algerian soccer clubs currently sponsored by OTA (MCA, USMA and ESS). In addition, several handset and tablet related outdoor campaigns were launched during the period, last one being around the Samsung Galaxy Tab. During the quarter, OTA celebrated its 10 th anniversary through extensive radio, press, outdoor and TV campaigns. Within the scope of this celebration, several initiatives were developed, including the FIKRA conference, where well-known speakers talk about the future. The Kids Cup was a well appreciated event by which a professional soccer team played at their home stadium against 100 orphaned children. Djezzy s revenues increased by 9% YoY in local currency terms. EBITDA increased 8% YoY in local currency terms, while subscribers reached 17.8 million, showing a growth of approximately 8% YoY. The inability to carry out maintenance and expansion works and to secure essential goods and services for the network represent a key source of high operational uncertainty for the months to come. 1. Market share is calculated according to our data warehouse 2. Figures for three month period. P a g e 9

11 3-2 Mobilink, Pakistan Table 12: Mobilink key indicators Financial data 4Q12 4Q11 Change Operational data 4Q12 4Q11 Change Revenues (USD 000) 282, ,175 (1.0%) Subscribers 36,141,241 34,213, % Revenues (PKR bn) % Market Share % 30.7% (0.8) EBITDA (USD 000) 121, , % ARPU (USD) (7.4%) EBITDA (PKR bn) % ARPU (PKR) % EBITDA Margin 43.1% 40.9% 2.2 MOU % Capex (USD 000) 101, ,735 (7.9%) Churn 2 5.2% 7.2% (2) Pakistan Mobile Company Limited (PMCL) operates under the brand Mobilink and has established itself as a market leader amongst Pakistan s GSM network operators, providing prepaid and postpaid voice and data services to individuals and corporate clients across Pakistan. Mobilink is focused on retaining and strengthening its market share to achieve revenue growth, whilst continuing to reduce operational costs. During 4Q12, the Pakistani telecom market continued to face strict regulatory guidelines on issues pertaining to security situation of the country. All cellular networks in major cities were shut down a few times upon government request for security reasons, during Eid holiday in October, Ashura and other occasions in November and December, resulting in revenue loss for all cellular operators. Furthermore, new regulatory guidelines were issued on retail channel sales. In the wake of these developments, the industry remained very competitive as operators introduced aggressive customer engagement campaigns. Mobilink signed an agreement with Huawei and Alcatel-Lucent for modernizing the network, paving the way to introducing 3G services, as soon as these are licensed in Pakistan. On November , Mobilink, in partnership with Waseela Microfinance Bank, launched Mobile Financial Services with MobiCash with a commitment to be the safest and most reliable means of financial transactions in Pakistan. Initial services offered include domestic money remittance and bill payment. Mobilink maintained its focus on extending leadership in mobile data services, by offering a combination of speed and convenience to both youth and mass segments. Its time, application and content based products, namely unlimited daily and weekly bundles enhanced data usage. The Music Portal gave customers an opportunity to stream latest international and regional content using mobile internet. Furthermore, the company continued to introduce the latest innovative devices and smartphones for its customers. In collaboration with leading manufacturers HTC, Nokia and Blackberry, several high-end and low-end GPRS enabled handsets were introduced to maintain technology leadership and improve mobile internet penetration in Pakistan. On the VAS side, new features and services were launched during the quarter including Sports Portal, Youth Portal, Job Alerts and Ring Back Tone Copy Feature. Voice remained core area of competitiveness throughout the year. Location based offers remained another key focus area and were presented to customers in areas with network availability. In addition, aggressive bundles and bonus offers were introduced to engage the mass segment. On the postpaid side, a new value for money package was introduced offering an attractive value proposition for the customers including free minutes and SMS to all networks, as well as unlimited calls to one special number. 1. Market share, as announced by the Regulator in Pakistan is based on information disclosed by the other operators which use different subscriber recognition policies. As of this release, market share for December had not been disclosed by the regulator. The above figure reflects market share as of November 30, Figures for three month period. P a g e 11

12 Mobilink revenues amounted to PKR 27.2 billion for the fourth quarter of 2012, a growth of 9% YoY in local currency terms. While EBITDA reached PKR 12 billion, a 12% increase YoY, translating to an improved EBITDA margin of 43.1%. Capex decreased by 8% to USD101 million, in comparison to the intensive network expansion that took place during Total subscribers reached 36.1 million customers, growing by 6% YoY. 3-3 banglalink, Bangladesh Table 13: bangalink key indicators Financial data 4Q12 4Q11 Change Operational data 4Q12 4Q11 Change Revenues (USD 000) 138, , % Subscribers 25,882,698 23,753, % Revenues (BDT bn) % Market Share % 27.9% (1.1) EBITDA (USD 000) 51,543 24, % ARPU (USD) (5.6%) EBITDA (BDT bn) % ARPU (BDT) (1.5%) EBITDA Margin 37.3% 19.2% 18.1 MOU (7.9%) Capex (USD 000) 41,962 69,326 (39%) Churn 2 7.4% 5.4% 2 Orascom Telecom Bangladesh ( OTB ) provides its services under two brand names: banglalink and Icon. OTB s marketing strategy is oriented towards targeting different consumer segments with tailored products and services to cater for the needs of these segments. The telecommunications sector in Bangladesh has experienced lower growth rates due to regulatory interventions during 4Q12. The regulator has enforced the implementation of a 10 seconds pulse for all packages including Interactive Voice Response (IVR) services from September 2012 and a post-activation sales process from October 2012 stopping sales of pre-activated SIMs. The post sales activation process has slowed down industry sales, resulting in a drop in the total subscribers of the market compared to 3Q12. Moreover, the regulator has instructed all MNOs to disconnect all bilateral connectivity and exchange traffic through ICXs, which has led to increased interconnection costs. During 4Q12, banglalink continued to launch attractive services and offers to the market promoting voice, VAS and data. banglalink launched new data and SMS offers alongside voice, loyalty programs, bonus on recharge, and reactivation promotions at competitive tariffs. Segment-specific offers have been introduced for the SMEs, professionals and high value customers. banglalink witnessed a remarkable increase in VAS, MFS, and mobile data revenues. banglalink s revenues increased by 13% YoY reaching BDT 11.2 billion. While EBITDA amounted to BDT 4.2 billion marking an increase of 100% YoY, due to savings on commercial opex (SIM tax subsidy). By the end of 2012, banglalink s subscriber base stood at approximately 26 million customers, growing by 9% YoY, with a slight decrease in comparison to 3Q12, which resulted from the disconnection of high value suspected VoIP users, in compliance with new self-regulations set by BTRC, which is expected to have a significant negative impact during Market share, as announced by the Regulator in Bangladesh is based on information disclosed by the other operators which use different subscriber recognition policies. 2. Figures for three month period. P a g e 11

13 3-4 WIND Mobile, Canada Table 14: WIND Mobile key indicators 1 Operational data 4Q12 4Q11 Change Subscribers 590, , % ARPU (USD) % ARPU (CAD) % Globalive Wireless Management Corp. ( Company or GWMC ), operating its wireless business under the brand name WIND Mobile, is a Canadian wireless services provider. OTH intends to acquire control of WIND Mobile Canada. During 4Q12, OTH announced the conversion of non-voting shares into voting shares, which would result in OTH s holding an indirect 65.1% voting and economic interest in GMWC, subject to Canadian regulatory approval. In addition, in January 2013 OTH entered into an agreement to acquire the stake of Mr Lacavera in WIND Mobile Canada, subject to certain regulatory approvals, which will bring OTH s stake in WIND Mobile Canada to 99.3%. During 4Q12, WIND Mobile continued to strongly deliver on its "Value Plus" strategy adding primarily postpaid subscribers while carefully managing prepaid economics for both voice and mobile broadband customers. WIND Mobile added 79,954 subscribers during the fourth quarter increasing its active subscriber base to 590,438. It should be highlighted that more than 70% of gross additions during the quarter were postpaid customers. On the commercial front, WIND Mobile enjoyed a strong holiday season. A new media campaign and promotional offers were launched to support the important selling season. With respect to handsets, the strength of the Samsung Galaxy SIII continued throughout the quarter. In addition, the company continued to add to its high-end Android devices with the introduction of the Samsung Galaxy Note II, the LG Optimus 4x, the SONY Xperia ION and the Huawei D-Quad. In addition, the company maintained its focus on expanding its network and launched Peterborough and Windsor in 4Q12, increasing population coverage to exceed 14 million, alongside continuous network quality improvements and increased sites on air to 1,300 sites. WIND Mobile grew its distribution footprint and branded POS to reach 335 by end of Wind Canada is consolidated according to equity method. 2. Figures for three month period. P a g e 12

14 3-5 Telecel Globe Table 14: Telecel Globe key indicators Operational / Financial data 4Q12 4Q11 Change Revenues 1 (USD 000) 22,899 23,743 (3.6%) EBITDA 1 (USD 000) 6,964 (5,291) n.m. EBITDA Margin 30.4% (22.3%) 52.7 Capex 1 (USD m) (80.0%) Telecel Globe, a wholly owned subsidiary of OTH, owns two GSM networks in Burundi and Central African Republic (CAR). During 4Q12, Telecel Globe s revenues reached USD 23 million, witnessing a decrease of 4% YoY, primarily due to lower revenues from CAR during December compared to the same period last year, following the security situation in the country. Furthermore, the devaluation of local currencies against the US dollar in CAR and Burundi contributed to the decrease in revenues. However, revenues in local currency terms for FY 2012 increased by 12% and 29% in CAR and Burundi respectively. EBITDA reached approximately USD 7 million, translating into an improved EBITDA margin of 30.4%. EBITDA for FY 2012 achieved a triple digit growth in CAR and Burundi in local currency terms. 1. Revenue, EBITDA and Capex figures are for the Central African Republic and Burundi, as Zimbabwe is not consolidated. As per IFRS, 4Q 2011 figures have not been restated to reflect the disposal of Namibia in P a g e 13

15 4. Financial Statements (IFRS) Income Statement USD thousands 4Q12 4Q11 Change FY12 FY11 Change Revenues 908, ,711 1% 3,626,767 3,635,578 (0.2%) Other Income 16,062 9,278 33,933 30,252 Total Expense (505,262) (558,500) (1,912,155) (2,019,087) Net unusual Items 6,358 (47) 6,113 (0) EBITDA 1 425, ,442 23% 1,754,658 1,646,743 7% Depreciation & Amortization (174,260) (191,354) (705,096) (773,472) Impairment of Non-Current Assets (6,979) (6,522) (12,269) (10,026) Gain (Loss) on Disposal of Non-Current Assets (12,722) (360) (17,862) 58,085 Operating Income 231, ,207 56% 1,019, ,331 11% Financial Expense (124,726) (114,295) (457,858) (535,732) Financial Income 21,433 19,215 77,090 79,625 Foreign Exchange Gain (Loss) (89,471) (50,493) (74,139) (150,359) Net Financing Cost (192,764) (145,574) (454,907) (606,466) Share of Profit (Loss) of Associates (26,234) (51,696) (103,279) (135,280) Impairment of Financial Assets (339,126) (21,888) (339,126) (21,888) Other non-operating cost (74,399) - (74,399) - Profit Before Tax (400,981) (49,063) n.m. 47, ,696 (70%) Income Tax (67,925) (106,381) (253,480) (243,511) Profit from Continuing Operations (468,896) (155,444) n.m. (205,760) (85,815) n.m. Gains or losses from discontinued operations - 31, ,169 3 Profit for the Period (468,896) (123,468) n.m. (205,760) 660,354 n.m. Attributable to: Equity Holders of the Parent 4 (474,353) (125,179) n.m. (224,928) 627,586 n.m. Earnings Per Share (US$/GDR) 5 (0.08) (0.02) (0.04) 0.13 Minority Interest 5,457 1,711 19,168 32,768 Net Income (468,896) (123,468) n.m. (205,760) 660,354 n.m. 1. Management presentation developed from IFRS financials. 2. Reflects the effect of the spun off assets. 3. On 4 January 2011, OTH sold its entire shareholding in Orascom Tunisia Holding and Carthage Consortium through which OTH owned 50% of Orascom Telecom Tunisia ( OTT ). The figure also includes the effect of the spun-off assets. 4. Equates to net income after minority interest. 5. Based on a weighted average for the outstanding number of GDRs of 1,049,138,124 for 4Q12 and 12M12, and 1,046,278,130 GDRs for 4Q11, and 1,046,175,604 GDRs for 12M11. P a g e 14

16 Balance Sheet USD thousands 31 December December 2011 Assets Property and Equipment (net) 2,493,620 2,901,831 Intangible Assets 1,448,712 1,557,590 Other Non-Current Assets 858,099 1,089,077 Total Non-Current Assets 4,800,431 5,548,498 Cash and Cash Equivalents 2,025,844 1,013,543 Trade Receivables 233, ,195 Other Current Assets 1,056,461 1,187,206 Total Current Assets 3,315,782 2,405,944 Total Assets 8,116,213 7,954,442 Equity Attributable to Equity Holders of the Company 1,555,756 1,855,630 Minority Share 74,492 56,729 Total Equity 1,630,248 1,912,359 Liabilities Long Term Debt 4,074,700 3,492,164 Other Non-Current Liabilities 232, ,159 Total Non-Current Liabilities 4,307,656 3,747,323 Short Term Debt 682, ,826 Trade Payables 710, ,289 Other Current Liabilities 785,178 1,012,644 Total Current Liabilities 2,178,309 2,294,759 Total Liabilities 6,485,965 6,042,083 Total Liabilities and Shareholder s Equity 8,116,213 7,954,442 Net Debt 1 2,731,499 3,022, Net debt is calculated as a sum of short term debt, long term debt, less cash and cash equivalents. P a g e 15

17 Cash Flow Statement USD thousands 31 Dec Dec 2011 Continued Operations Cash Flows from Operating Activities Loss for the Period (205,760) (85,815) Depreciation, Amortization & Impairment of Non-Current Assets 717, ,498 Income Tax Expense 253, ,511 Net Financial Charges 454, ,466 Share of Loss of Associates 103, ,280 Impairment of Financial Assets 339,126 21,888 Other 129,084 (7,567) Changes in Assets Carried as Working Capital 24,156 (187,740) Changes in Other Liabilities Carried as Working Capital (8,748) (53,006) Income Tax Paid (500,793) (199,392) Interest Expense Paid (114,911) (217,028) Net Cash Generated by Operating Activities 1,191,185 1,040,095 Cash Flows from Investing Activities Cash Outflow for Investments in Property & Equipment, Intangible Assets, and Financial Assets & Consolidated (412,481) (648,058) Subsidiaries Proceeds from Disposal of Property & Equipment, Subsidiaries and Financial Assets (16,478) 26,713 Advances & Loans made to Associates & other parties (161,313) (202,886) Dividends & Interest Received 10,489 14,940 Net Cash Used in Investing Activities (579,783) (809,291) Cash Flows from Financing Activities Proceeds from loans, banks' facilities and bonds 1,300, ,504 Payments for loans, banks' facilities and bonds (881,948) (1,619,023) Net Payments from financial liabilities (79,429) 1,800 Net Change in Cash Collateral 120,964 (129,194) Net Cash (used in) generated by Financing Activities 460,393 (871,913) Discontinued operations Net cash generated by operating activities - 90,242 Net cash (used in) generated by investing activities - 1,044,123 Net cash (used in) generated by financing activities - (9,024) Net cash generated from discontinued operations - 1,125,342 Net Increase in Cash & Cash Equivalents 1,071, ,233 Cash included in Assets Held for Sale (7) (262,656) Effect of Exchange Rate Changes on Cash & Cash Equivalents (59,487) (32,119) Cash & Cash Equivalents at the Beginning of the Period 1,013, ,085 Cash & Cash Equivalents at the End of the Period 2,025,844 1,013,543 P a g e 16

18 5. Appendix Foreign Exchange rates applied to the Financial Statements Currency Egyptian Pound/USD Dec Sept Dec Change 3 Change 3 Dec vs Dec vs Dec Sept Income Statement Balance Sheet Algerian Dinar/USD Income Statement Balance Sheet (0.6) Pakistan Rupee/USD Income Statement Balance Sheet Bangladeshi Taka/USD Income Statement (0.3) Balance Sheet (2.5) (2.3) Canadian Dollar/USD Income Statement (1.1) Balance Sheet (2.9) Represents the average monthly exchange rate from the start of the year until the end of the period. 2. Represents the spot exchange rate at the end of the period. 3. Appreciation / (Depreciation) of US dollars in comparison to local currency. P a g e 17

19 Ownership structure and consolidation methods Subsidiary GSM Operations Ownership 31 December Consolidation Method 31 December IWCPL (Pakistan) % % Full Consolidation Full Consolidation Orascom Telecom Algeria % 96.81% Full Consolidation Full Consolidation Telecel (Africa) % % Full Consolidation Full Consolidation Telecel Globe % % Full Consolidation Full Consolidation OT Ventures % % Full Consolidation Full Consolidation Non-GSM Operations Ring 99.00% 99.00% Full Consolidation Full Consolidation OTCS % % Full Consolidation Full Consolidation OT ESOP % % Full Consolidation Full Consolidation Moga Holding % % Full Consolidation Full Consolidation Oratel % % Full Consolidation Full Consolidation C.A.T % 50.00% Proportionate Consolidation Proportionate Consolidation OT Holding % % Full Consolidation Full Consolidation FPPL % % Full Consolidation Full Consolidation OIH % % Full Consolidation Full Consolidation OTFCSA % % Full Consolidation Full Consolidation OT Holding Canada % % Full Consolidation Full Consolidation Proportionate Proportionate ITCL 50.00% 50.00% Consolidation Consolidation SAWLTD % % Full Consolidation Full Consolidation OT_OSCAR % % Full Consolidation Full Consolidation TMGL % % Full Consolidation Full Consolidation OTO % % Full Consolidation Full Consolidation Waselabank % % Full Consolidation Full Consolidation CORTEX % % Full Consolidation Full Consolidation 1. Direct and Indirect stake through Moga Holding Ltd. and Oratel. 2. OT Ventures owns 100% of Sheba Telecom which operates under the trade name banglalink. 3. Direct and indirect stake through International Telecommunications Consortium Limited (ITCL). 4. OIH owns 100% of Orascom Telecom Iraq, which sold Iraqna in December The holding company for OTH s Share in OTHC, which has been accounted for under the equity method. P a g e 18

20 Glossary of terms Average Revenue per User ( ARPU ): Average monthly recurrent revenue per customer (excluding visitors roaming revenue and connection fee). This includes airtime revenue (national and international), as well as, monthly subscription fee, SMS, GPRS & data revenue. Quarterly ARPU is calculated as an average of the last three months. Capital Expenditure ( Capex ): Tangible & Intangible fixed assets additions during the reporting period, includes work in progress, network, IT, and other tangible and intangible fixed assets additions but excludes license fees. Churn: Disconnection rate. This is calculated as the number of disconnections during a month divided by the average customer base for that month. Churn Rule: A subscriber is considered churned (removed from the subscriber base) if he exceeds the 90 days from the end of the validity period without recharging. It is worth noting that the validity period is a function of the scratch denomination. In cases where scratch cards have open validity, the subscriber is considered churned in case he has not made a single billable event in the last 90 days (i.e. outgoing or incoming call or sms, wap session). Open cards validity is applied for OTA, Mobilink and Banglalink so far. Minutes of Usage ( MOU ): Average airtime minutes per customer per month. This includes billable national & international outgoing traffic originated by subscribers (on-net, to land line & to other operators). Also, this includes incoming traffic to subscribers from land line or other operators. OTH s Market Share Calculation Method: The market share is calculated through the data warehouse of OTH s subsidiaries. The number of SIM cards of competitors that appeared in the call detail record of each of OTH s subsidiaries is collected. This reflects the number of subscribers of the competition. However, OTH deducts the number of SIM cards that did not appear in the call detail records for the last 90 days to account for churn. The same is applied to OTH subsidiaries. This method is used to calculate the market shares of Djezzy. In Pakistan and Bangladesh, Market share as announced by the Regulators is based on disclosed information by the other operators which may use different subscriber recognition policy Organic Growth for Revenue and EBITDA: Are non-ifrs financial measures that reflect changes in Revenue and EBITDA excluding foreign currency movements and other factors, such as business under liquidation, disposals, mergers and acquisitions. We believe readers of this earnings release should consider these measures as it is more indicative of the Group s on-going performance. Management uses these measures to evaluate the Group s operational results and trends. Investor Relations contacts otinvestorrelations@otelecom.com Website: Tel: /21/22 Fax: /54 This presentation contains statements that could be construed as forward looking. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of the subscriber base, estimates regarding future growth in the different business lines and the global business, market share, financial results and other aspects of the activity and situation relating to the company. Such forward looking statements are no guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward looking statements as a result of various factors. You are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of this presentation, which is not intended to reflect Orascom Telecom s business or acquisition strategy or the occurrence of unanticipated events. P a g e 19