CAIRO: Telecom Egypt expects to maintain profitability in the full year in the face of economic turmoil, as the start-up of a cable project in the final quarter boosts wholesale revenues, company executives said on Monday.
The company earlier reported a 21 percent decline in third-quarter net profit to LE 622.7 million ($104.2 million) as it continues to suffer the fall-out of a popular uprising. Net profit in 2010 was LE 3.3 billion.
Asked in an interview whether the company would maintain its level of full-year net profit, Chief Financial Officer Hassan Helmy said: "Yes."
Telecom Egypt, which has a monopoly on land-line infrastructure in the country of 80 million, expects to propose a higher dividend pay-out ratio to shareholders at their next annual meeting, Helmy said.
The company, which is banking on data services to offset lower fixed-line income, saw a net income of LE 789.8 million in the same period a year earlier.
Consolidated operating revenues fell 10 percent to LE 2.35 billion amid continued disruption to Egypt’s business environment and seasonal effects of the Muslim holy month of Ramadan, it said.
Egypt’s economic slowdown also reduced tourism and cut usage by business customers, hitting international call volume.
"Economic uncertainty, depressed tourism levels and slower business activity have … created a drag on TE’s short term financial performance," said Chairman Akil Beshir in a statement.
"While there has not yet been a return to normal operating conditions in Egypt, we have mitigated these effects to a greater extent than our competitors," he said.
The malaise in Egypt’s economy hit household incomes and reduced the number of active Telecom Egypt subscribers.
"We have adjusted active connections accordingly, which has temporarily reduced the number of subscribers we deem as active," said Beshir.