Third Quarter 2014 - Global Telecom HoldingTelecom...reactivation offers with an attractive tariff...
Transcript of Third Quarter 2014 - Global Telecom HoldingTelecom...reactivation offers with an attractive tariff...
Global Telecom Holding 3Q14 | 1
3Q14 Highlights1 Total customers grew 5% YoY to reach 91.4 million, driven by strong growth in all operating units, particularly in
Bangladesh.
Revenue stood at USD 830 million, negatively impacted by competitive pressure in Algeria and Pakistan, partially offset
by continued strong recovery in Bangladesh.
EBITDA amounted to USD 356 million with a group EBITDA margin of 42.9%. EBITDA margins for the major subsidiaries were: Djezzy 52.5%, Mobilink 34.9%, and banglalink 39.7%.
GTH generated USD 114 million of operating cash flow3 in 3Q14.
Net Debt4 stood at USD 2.7 billion. Net Debt/EBITDA
5 increased to 1.8x as at September 30, 2014.
Cairo/London (November 12, 2014), Global Telecom Holding S.A.E. (‘GTH’, or ‘the Group’) (EGX: GLTD.CA, GTHE EY. LSE:GTLD LI, GLTD:TQ), a leading provider of mobile telecommunications in Africa and Asia, announces its consolidated financial and operating results for the third quarter ending September 30, 2014.
Vincenzo Nesci, Chief Executive Officer, comments:
Table 1: Group Key Indicators
Thousands 3Q14 3Q13 Change Organic
Growth2
9M14 9M13 Change
Total customers
91,357 87,172 5% 91,357 87,172 5%
Revenue (USD) 830,015 860,822 (4%) (5%) 2,523,997 2,613,823 (3%)
EBITDA (USD)
356,187 407,674 (13%) (14%) 1,140,440 1,259,053 (9%)
EBITDA margin 42.9% 47.4% (4.5pp) 45.2% 48.2% (3pp)
Net income (USD) (154,324) 50,791 n.m. (284,579) (175,546) n.m.
EPS (USD per GDR) (0.15) 0.05 n.m. (0.27) (0.17) n.m.
Capex (USD) 230,965 196,468 18% 689,474 287,304 140%
In the third quarter of 2014, our customers increased 5% YoY to reach 91.4 million, driven by strong growth in all operating units, particularly in Bangladesh. Group revenue amounted to USD 830 million for the quarter, with an EBITDA of USD 356 million with an EBITDA margin of 43%, and generated USD 114 million in operating cash flow
4 during the quarter. Net loss for the quarter was
USD 154 million, negatively impacted by financial expense of USD 181 million, foreign exchange losses of USD 33 million and impairment of assets sold in Burundi and Central African Republic of USD 36 million. Our CAPEX increased 18% YoY to reach USD 231 million, driven by the ongoing 3G rollout and deployment in Algeria, Bangladesh and Pakistan, as well as the network modernization in Bangladesh and Pakistan.
In Algeria, we launched 3G services on July 5, 2014 and are currently present in 14 provinces. Following 3G launch, Djezzy started to stabilize its market-leading position. In Bangladesh, we concluded the 2G network coverage improvement and modernization, as well as nationwide 3G coverage for all 64 districts. In Pakistan, the 2G network modernization program is on track and completion is expected during 4Q14. With regards to the Algeria transactions, we expect to conclude the transaction before end of this year. Recently, we announced the sale of WIND Mobile Canada for CAD 135 million and Telecel Globe, which represents our holdings in Burundi and Central African Republic, for USD 65 million.
1. Income Statement and Balance Sheet figures are in US dollars and are prepared 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. Operating cash flow is EBITDA less CAPEX, excluding license fees. 4. Net Debt is calculated as a sum of short term debt, long term debt, less cash and cash equivalents. 5. Net Debt/EBITDA is calculated for the annualized figures for the nine month ending September 30, 2014.
Global Telecom Holding 3Q14 | 2
CONTENTS
Performance Review 3
GTH Operations 8
Financial Statements 12
Appendix 15
Global Telecom Holding 3Q14 | 3
1. Performance Review
1-1 Customers
Table 2: Customer base
Subsidiary/thousands 3Q14 3Q13 Change
Djezzy, Algeria 18,222 17,038 7%
Mobilink, Pakistan 38,700 37,365 4%
banglalink, Bangladesh 30,218 28,101 8%
Sub-Saharan Africa
4,217 4,668 (10%)
Subtotal 91,357 87,172 5%
Total customers grew 5% YoY to reach 91.4 million by the end of 3Q14, driven by strong growth in all operating units, particularly in Bangladesh.
In Algeria, Djezzy grew its mobile customer base 7% YoY to 18.2 million. Djezzy stabilized its market-leading position in 3Q14, following the launch of 3G services.
In Pakistan, Mobilink’s mobile customer base increased 4% YoY to 38.7 million, driven by the focus on subscriber engagement and acquisition through reactivation and aggressive bundle offers in efforts to mitigate the adverse impact on sale following the implementation of the Biometric Verification System (“BVS”) regime.
In Bangladesh, banglalink’s customer base grew 8% YoY to 30.2 million, supported by revised start-up and reactivation offers with an attractive tariff upon recharge, including data, voice and SMS, handset bundle offer, daily internet packages in addition to various campaigns such as bonus on recharge offers and bundle gifting service. Mobile data revenue increased 66% YoY, supported by 3G services and Mobile Financial Services (“MFS”).
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1-2 Revenue
Table 3: Revenue in US dollars
Subsidiary/thousands 3Q14 3Q13 Change 9M14 9M13 Change
Mobile
Djezzy, Algeria 428,186 450,483 (5%) 1,294,463 1,348,391 (4%)
Mobilink, Pakistan 235,225 258,163 (9%) 742,399 825,399 (10%)
banglalink, Bangladesh 141,974 128,909 10% 416,697 375,579 11%
Telecel Globe, Africa
24,616 22,999 7% 70,289 62,588 12%
Total Mobile 830,001 860,554 (4%) 2,523,848 2,611,957 (3%)
Telecom Services
Ring 14 268 n.m. 149 1,866 n.m.
Total Consolidated Revenue 830,015 860,822 (4%) 2,523,997 2,613,823 (3%)
Table 4: Revenue in local currency
Subsidiary/billions 3Q14 3Q13 Change 9M14 9M13 Change
Mobile
Djezzy, Algeria (DZD) 34 36 (5%) 103 107 (4%)
Mobilink, Pakistan (PKR) 24 27 (9%) 76 82 (7%)
banglalink, Bangladesh(BDT) 11 10 10% 32 29 10%
Group revenue amounted to USD 830 million for 3Q14, which decreased 5% YoY organically.
In Algeria, revenue decreased 5% YoY in local currency, as a result of strong competition as other Algerian operators launched 3G services in December 2013.
In Pakistan, revenue decreased 9% YoY in local currency, negatively impacted by competitive pressure and a challenging regulatory environment with country wide implementation of BVS that led to a YoY slowdown in customer base growth. In addition, lower voice revenue was driven by the shift in Mobilink’s pricing strategy to counter competition; lower VAS revenue was the result of efforts to enhance customers experience particularly the shift to a transparent charging regime on subscription. Furthermore, the lower interconnect revenue YoY was the result of lower local and international incoming traffic from the international clearing house.
In Bangladesh, revenue increased 10% YoY in local currency, supported by higher voice, interconnection and VAS revenue, primarily due to 8% YoY growth in customers to 30.2 million.
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1-3 ARPU
Table 5: Blended average revenue per user (USD) Subsidiary 3Q14 3Q13 Change
Djezzy, Algeria 7.9 8.6 (7%)
Mobilink, Pakistan 1.9 2.3 (16%)
banglalink, Bangladesh 1.5 1.5 -
Table 6: Blended average revenue per user in local currency
Subsidiary 3Q14 3Q13 Change
Djezzy, Algeria (DZD) 629 680 (8%)
Mobilink, Pakistan (PKR) 195 229 (15%)
banglalink, Bangladesh (BDT) 120 121 (1%)
In Algeria, Djezzy’s ARPU decreased 8% YoY in local currency, as a result of launch of 3G services by other operators in December 2013.
In Pakistan, Mobilink’s ARPU decreased 15% YoY in local currency, negatively impacted by a lower Average Price per Minute (“APPM”) due to aggressive on-net offerings in the market.
In Bangladesh, banglalink’s ARPU decreased 1% YoY in local currency, primarily due to the ongoing promotional price competition and changing the mix of on-net/off-net call traffic that led to lower APPM YoY.
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1-4 EBITDA1
Table 7: EBITDA in US dollars
Subsidiary/thousands 3Q14 3Q13 Change 9M14 9M13 Change
Mobile
Djezzy, Algeria 216,928 257,649 (16%) 702,167 793,438 (12%)
Mobilink, Pakistan 77,952 109,339 (29%) 286,646 348,204 (18%)
Banglalink, Bangladesh 56,293 46,872 20% 159,512 143,513 11%
Telecel Globe, Africa
7,290 (3,445) n.m. 23,373 6,700 249%
Total Mobile 358,463 410,415 (13%) 1,171,698 1,291,855 (9%)
Ring (857) (820) n.m (3,244) (3,467) n.m
GTH and Other2
(1,419) (1,921) n.m (28,014) (29,335) n.m
Total Consolidated 356,187 407,674 (13%) 1,140,440 1,259,053 (9%)
Table 8: EBITDA in local currency
Subsidiary/billions 3Q14 3Q13 Change 9M14 9M13 Change
Mobile
Djezzy, Algeria (DZD) 18 21 (13%) 56 63 (11%)
Mobilink, Pakistan (PKR) 9 12 (30%) 29 35 (18%)
banglalink, Bangladesh (BDT) 4 4 20% 12 11 10%
Group EBITDA decreased organically 14% YoY. In Algeria, EBITDA decreased 13% YoY in local currency, negatively impacted by higher network cost due to the 3G rollout and higher HR cost.
In Pakistan, EBITDA decreased 30% YoY in local currency; negatively impacted by lower service revenue YoY, alongside higher customer associated cost, network and HR costs.
In Bangladesh, EBITDA increased 20% YoY in local currency, driven by the growth in revenue, and lower customer
acquisition costs, partially offset by higher network costs.
Consolidated EBITDA margin of mobile revenue for 3Q14 was 43.2%.
1. EBITDA excludes management fees which were previously treated as a cost in each subsidiary and as a revenue for the holding company.
2. 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.
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1-5 Net Income Net loss attributable to Equity Holders of the Parent amounted to USD 158 million, which was negatively impacted by financial expenses of USD 182 million, foreign exchange losses of USD 33 million and impairment of sold assets in Burundi and Central African Republic of USD 36 million. EPS for the three months ended September 30, 2014 amounted to USD (0.15)/GDR.
1-6 CAPEX1 Table 9: CAPEX in US dollars
Subsidiary/millions 3Q14 3Q13 Change 9M14 9M13 Change
Djezzy, Algeria 84,010 11,623 623% 306,464 32,889 832%
Mobilink, Pakistan 97,129 57,183 70% 262,000 101,260 159%
Banglalink, Bangladesh2 49,826 127,522 (61%) 119,265 152,215 (22%)
Telecel Globe - 140 - 1,745 940 86%
Total 230,965 196,468 18% 689,474 287,304 140%
Total CAPEX for the quarter increased 18% YoY to USD 231 million. In Algeria, CAPEX increased six folds YoY mainly due to the ongoing investments in the high-speed 3G network. In Pakistan, CAPEX increased 70% YoY due to the network modernization project and 3G rollout. In Bangladesh, CAPEX decreased 61% YoY mainly due to the 2G coverage and modernization project in 2013.
1-7 Cash and Debt Net debt for the third quarter of 2014 amounted to USD 2.7 billion with a Net Debt/EBITDA3 of 1.8x as of September 30, 2014.
1. CAPEX excludes license fees.
2. In Bangladesh, CAPEX for 3Q13 included USD 110 million relating to licenses.
3. Net Debt/EBITDA is calculated for the annualized figures for the nine month ending September 30, 2014.
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2. GTH Operations
The Group operates in six countries with favourable dynamics in Africa and Asia. It is worth highlighting that GTH serves a population of 431 million people.
PAKISTAN Population: 196.2 million GDP Growth: 3.6% GDP/Capita PPP: USD 3,100 Pop. Under 15 years: 33%
BANGLADESH Population: 166.3 million GDP Growth: 5.8% GDP/Capita PPP: USD 2,100 Pop. Under 15 years: 32%
BURUNDI Population: 10.4 million GDP Growth: 4.5% GDP/Capita PPP: USD 600 Pop. Under 15 years: 46%
CENTRAL AFRICA REPUBLIC Population: 5.3 million GDP Growth: (14%) GDP/Capita PPP: USD 700 Pop. Under 15 years: 41%
ALGERIA Population: 38.8 million GDP Growth: 3.1% GDP/Capita PPP: USD 7,500 Pop. Under 15 years: 28%
ZIMBABWE Population: 13.8 million GDP Growth: 3.2% GDP/Capita PPP: USD 600 Pop. Under 15 years: 38%
Figures from CIA factbook.
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2-1 Djezzy, Algeria
Table 10: Djezzy key indicators
Financial data 3Q14 3Q13 Change
Operational data 3Q14 3Q13 Change
Revenue (USD 000) 428,186 450,483 (5%)
Customers (000) 18,222 17,038 7%
Revenue (DZD bn) 34 36 (5%)
ARPU (USD)1 7.9 8.6 (7%)
EBITDA (USD 000) 216,928 257,649 (16%)
ARPU (DZD)1 629 680 (8%)
EBITDA (DZD bn) 18 21 (13%)
MOU1 200 216 (8%)
EBITDA Margin 52.5% 57.2% (4.7pp)
Churn1 6.0% 7.3% (1.3pp)
Capex (USD 000) 84,010 11,623 623%
Orascom Telecom Algérie SpA (“OTA” or “the company”) operates a mobile 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.
During 3Q14, OTA launched several VAS including Facebook zero service, Djezzy Store, Djezzy App, Be Djezzy
application and new Ranati (RBT), in addition to B2B “3G pack” promotion, and Ramadan B2C promotion launch
(Djezzy Carte, Allo, Djezzy Control and Djezzy Classic). Following the launch of 3G services in July 2014, Millennium
3G (a hybrid voice and data product) achieved strong results with more than 150k gross additions during the
quarter. Today, Djezzy’s 3G services are available in 14 provinces.
OTA’s revenue decreased 5% YoY in local currency, as a result of strong competition as other Algerian operators
launched 3G services seven month before Djezzy. Mobile data revenue achieved strong growth post 3G launch
and the number of mobile data customers increased 8 folds. EBITDA decreased 13% YoY in local currency,
negatively impacted by higher network cost due to the 3G rollout and higher HR cost. CAPEX surged six folds YoY
mainly due to the ongoing investments in the high-speed 3G network.
1. Figures for three month period.
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2-2 Mobilink, Pakistan
Table 11: Mobilink key indicators
Financial data 3Q14 3Q13 Change
Operational data 3Q14 3Q13 Change
Revenue (USD 000) 235,225 258,163 (9%)
Customers (000) 38,700 37,365 4%
Revenue (PKR bn) 24 27 (9%)
ARPU (USD)1 1.9 2.3 (16%)
EBITDA (USD 000) 77,952 109,339 (29%)
ARPU (PKR)1 195 229 (15%)
EBITDA (PKR bn) 9 12 (30%)
MOU1 236 222 7%
EBITDA Margin 34.9% 43.1% (8.2pp)
Churn1 6.8% 6.5% 0.3pp
Capex (USD 000) 97,129 57,183 70%
Pakistan Mobile Company Limited (“PMCL”) operates under the brand “Mobilink” and has established itself as a
market leader amongst Pakistan’s Mobile 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.
After 3G trials’ success, the momentum continued with attractive offers and campaigns. 3G bundles were made
more appealing for customers and were promoted through ATL and BTL campaigns in line with Mobilink’s
ambition to lead the mobile data market. To mitigate the impact on sales after the implementation of BVS
regime, Mobilink increased its focus on customers’ engagement through acquisition, reactivation and aggressive
bundle offers. Mobilink launched competitive daily, weekly, monthly and hybrid offers. Mobilink 3G customers
reached 1 million within 90 days of commercial launch, rendering it the fasted growing 3G service in Pakistan.
On the MFS front, Industry focus continued on retail incentive promotions and ATL campaigns. Bulk disbursement
services were launched for new corporate clients. Moreover, the first Government to Person (G2P) client signed
up to Mobicash during the quarter. Mobilink aims to increase its nationwide MFS footprint further in the future.
Mobilink’s revenue decreased 9% YoY in local currency, negatively impacted by competitive pressure and a
challenging regulatory environment with country wide implementation of BVS that led to a YoY slowdown in
growth of customers. In addition, lower voice revenue was driven by the shift in Mobilink’s pricing strategy to
counter competition; lower VAS revenue was the result of efforts to enhance customers experience particularly
the shift to a transparent charging regime on subscription. Furthermore, the lower interconnect revenue YoY was
the result of lower local and international incoming traffic from the international clearing house. MFS revenue
showed strong growth YoY, supported by multiple initiatives including continuation of sales channel engagement
promotions and the introduction of dedicated MFS agents. Mobile data revenue increased 40% YoY, supported by
3G services and MFS. EBITDA decreased 30% YoY in local currency; negatively impacted by lower service revenue
YoY, alongside higher customer associated cost, network and HR costs. CAPEX increased 70% YoY due to the
network modernization project and the 3G rollout. The network modernization project remains on track with
expected completion in 4Q14.
1. Figures for three month period.
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2-3 banglalink, Bangladesh
Table 12: banglalink key indicators
Financial data 3Q14 3Q13 Change
Operational data 3Q14 3Q13 Change
Revenue (USD 000) 141,974 128,909 10%
Customers (000) 30,218 28,101 8%
Revenue (BDT bn) 11 10 10%
ARPU (USD)1 1.5 1.5 -
EBITDA (USD 000) 56,293 46,872 20%
ARPU (BDT)1 120 121 (1%)
EBITDA (BDT bn) 4 4 20%
MOU1 200 189 6%
EBITDA Margin 39.7% 36.3% 3.4pp
Churn1 5.3% 5.1% 0.2pp
Capex (USD 000)2 49,826 127,522 (61%)
Banglalink Digital Communications Limited (“BDCL”) provides its services under two brand names: “banglalink”
and “Icon”. BDCL’s marketing strategy is oriented towards targeting different consumer segments with tailored
products and services to cater for the needs of these segments.
banglalink continued to expand its 3G footprint with more than 2,300 3G sites in all 64 districts, delivering the
best value for its customers. During the quarter, banglalink continued to focus on the mobile data market by
offering different 3G handset bundle with data packages, new 3G data packages and bonus on data packages to
enhance its customers’ base and usage in the growing 3G mobile data market. The operator launched a
gratification campaign on the occasion of having 3G footprint in all 64 districts, with the purpose of attracting new
mobile data customers and enhancing usage. All of which supported the growth in banglalink’s customers base by
8% YoY to reach 30.2 million, where mobile data customers exceeded 1 million and marked 125% YoY growth.
To attract new customers and increase usage, the mass market start-up offer was revised with an attractive tariff
upon recharge, which includes free Facebook and Whatsapp. Various campaigns such as bonus on recharge offers
were introduced to support top line. banglalink also launched “minute back in call drop” campaign, the first of its
kind in Bangladesh, to strengthen its network perception in line with the improvements already accomplished in
the network.
banglalink’s revenue increased 10% YoY in local currency, supported by higher voice, interconnection and VAS
revenue, primarily due to 8% YoY growth in customers to 30.2 million. Mobile data revenue increased 66% YoY,
supported by 3G services and MFS. EBITDA increased 20% YoY in local currency, driven by the growth in revenue,
and lower customer acquisition costs, partially offset by higher network costs. CAPEX decreased 61% YoY,
following the completion of the 2G coverage and modernization project alongside the 3G rollout during the
quarter.
1. Figures for three month period.
2. CAPEX for 3Q13 included USD 110 million relating to licenses.
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1. Management presentation developed from IFRS financials. 2. Incremental impairment of assets held for sale relating to CAR and Burundi’s expected sale. 3. Equates to net income after minority interest.
3. Financial Statements (IFRS)
Income Statement
USD thousands 3Q14 3Q13 Change 9M14 9M13 Change
Revenue 830,015 860,822 (4%) 2,523,997 2,613,823 (3%)
Other Income 10,705 6,791
28,950 10,160
Total Expense (484,533) (459,940)
(1,412,507) (1,364,931)
EBITDA1 356,187 407,674 (13%) 1,140,440 1,259,053 (9%)
Depreciation and Amortization (155,522) (159,115) (503,965) (502,878)
Impairment of Non-Current Assets (9,388) (7,841) (11,164) (8,976)
Gain (Loss) on Disposal of Non-Current Assets
(2,473) (458) (1,719) (1,456)
Impairment of Assets Held for Sale2 (36,255) 8,900 (58,684) (47,278)
Operating Income 152,549 249,160 (39%) 564,908 698,464 (19%)
Financial Expense (181,592) (126,856)
(463,212) (374,523)
Financial Income 1,929 10,684 17,150 31,528
Foreign Exchange Gain (Loss) (32,881) 12,738 (122,506) (246,384)
Share of Loss from Associates - (35,405) - (100,456)
Profit Before Tax (59,995) 110,321 n.m. (3,660) 8,629 n.m.
Income Tax (94,329) (59,530)
(280,919) (184,175)
Profit for the Period (154,324) 50,791 n.m. (284,579) (175,546) n.m.
Attributable to:
Equity Holders of the Parent3 (158,307) 46,104 n.m. (297,736) (190,275) n.m.
Earnings Per Share (USD/GDR) (0.15) 0.05 n.m. (0.27) (0.17) n.m.
Minority Interest 3,983 4,686 13,157 14,729
Net Income (154,324) 50,791 n.m. (284,579) (175,546) n.m.
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1. The equity caption in 2013 balance sheet has been adjusted to reflect the impact of post balance sheet events, a one-off charge of USD 2 billion, as per the Share Purchase Agreement signed by VimpelCom and GTH with FNI, which oblige GTH upon completion to discontinue legal dispute with respect to the tax receivable and account for the fines imposed by the Algerian Treasury.
2. Net Debt is calculated as a sum of short term debt, long term debt, less cash and cash equivalents.
Balance Sheet
USD thousands 30 September
2014 31 December
20131
Assets
Property and Equipment (net) 2,275,946 2,043,998
Intangible Assets 1,620,553 1,425,596
Other Non-Current Assets 135,473 88,190
Total Non-Current Assets 4,031,972 3,557,784
Cash and Cash Equivalents 2,864,189 2,838,448
Trade Receivables 228,572 225,641
Assets Held for Sale 117,863 170,380
Other Current Assets 462,916 646,539
Total Current Assets 3,673,540 3,881,008
Total Assets 7,705,512 7,438,792
Equity Attributable to Equity Holders of the Company (1,384,699) (1,114,848)
Minority Share 47,672 38,344
Total Equity (1,337,027) (1,076,504)
Liabilities
Long Term Debt 5,305,540 150,904
Other Non-Current Liabilities 539,690 392,461
Total Non-Current Liabilities 5,845,230 543,365
Short Term Debt 300,018 5,033,197
Trade Payables 862,963 814,668
Other Current Liabilities 2,034,328 2,124,066
Total Current Liabilities 3,197,309 7,971,931
Total Liabilities 9,042,539 8,515,296
Total Liabilities and Shareholder’s Equity 7,705,512 7,438,792
Net Debt2 2,741,369 2,345,653
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Cash Flow Statement
USD thousands 30 September
2014 30 September
2013
Cash Flows from Operating Activities Profit (Loss) for the Period (284,581) (175,546) Depreciation, Amortization and Impairment of Non-Current Assets
515,129 511,854
Income Tax Expense 280,779 184,175 Net Financial Charges 568,353 589,379 Share of Loss (Profit) of Associates - 100,456 Impairment of Financial Assets 58,684 47,278 Other 24,652 (54,400) Changes in Assets Carried as Working Capital (208,689) (80,787) Changes in Other Liabilities Carried as Working Capital 94,290 65,518 Income Tax Paid (192,071) (184,021) Interest Expense Paid (50,484) (83,908)
Net Cash Generated by Operating Activities 806,062 919,998
Cash Flows from Investing Activities Cash Outflow for Investments in Property and Equipment, Intangible Assets, and Financial Assets and Consolidated Subsidiaries
(956,393) (338,675)
Proceeds from Disposal of Property and Equipment, Subsidiaries and Financial Assets
23,082 14,052
Dividends and Interest Received 8,444 7,973
Net Cash Used in Investing Activities (924,867) (316,650)
Cash Flows from Financing Activities Proceeds from loans, banks' facilities and bonds 1,673,294 779,998 Payments for loans, banks' facilities and bonds (1,359,682) (965,982) Net Payments from financial liabilities (1,782) (1,747) Net Change in Cash Collateral 347 30,887
Net Cash generated by Financing Activities 312,177 113,156
Net Increase in Cash and Cash Equivalents 193,372 716,504
Cash included in Assets Held for Sale (4,257) (21,630) Effect of Exchange Rate Changes on Cash and Cash Equivalents (163,362) (88,737) Cash and Cash Equivalents at the Beginning of the Period 2,838,432 2,025,844
Cash and Cash Equivalents at the End of the Period 2,864,185 2,631,981
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4. Appendix Foreign Exchange rates applied to the Financial Statements
Change3
Change3
Currency September
2013 June 2014
September 2014
Sept 2014 vs
Sept 2014 vs
Sept 2013 June 2014
Egyptian Pound/USD
Income Statement1
6.8686 7.0177 7.0629 3% 1%
Balance Sheet2
6.8916 7.1519 7.1441 4% (0.1%)
Algerian Dinar/USD
Income Statement1
79.4809 78.4834 79.0873 (0.5%) 1%
Balance Sheet2
81.6850 79.2508 83.2171 2% 5%
Pakistan Rupee/USD
Income Statement1
99.7864 100.8990 100.749 1% (0.1%)
Balance Sheet2
106.0600 98.7235 102.6517 (3%) 4%
Bangladeshi Taka/USD
Income Statement1
78.2173 77.6181 77.5644 (1%) (0.1%)
Balance Sheet2
77.6650 77.6000 77.3750 (0.4%) (0.3%)
1. 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.
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Ownership structure and consolidation methods
Subsidiary Ownership
Sept 30 Consolidation Method
Sept 30
2013 2014 2013 2014
Mobile Operations
International Wireless Communications Pakistan Limited
100.00% 100.00% Full Consolidation Full Consolidation
Orascom Telecom Algerie SPA1
96.81% 96.81% Full Consolidation Full Consolidation
Telecel Centrafrique SA 100.00% 100.00% Full Consolidation Full Consolidation
Telecel Globe Limited 100.00% 100.00% Full Consolidation Full Consolidation
Telecom Ventures Limited2
100.00% 100.00% Full Consolidation Full Consolidation
Non-Mobile Operations
Ring Distribution SAE 99.00% 99.00% Full Consolidation Full Consolidation
Telecom CS Limited 100.00% 100.00% Full Consolidation Full Consolidation
Telecom ESOP Limited 100.00% 100.00% Full Consolidation Full Consolidation
Moga Holding Limited 100.00% 100.00% Full Consolidation Full Consolidation
Oratel International Inc. Limited 100.00% 100.00% Full Consolidation Full Consolidation
Consortium Algerien de Telecommunications SPA
3 50.00% 50.00% Proportionate Consolidation
Equity Consolidation
Global Telecom Holding 100.00% 100.00% Full Consolidation Full Consolidation
Financial Powers Plan Limited 100.00% 100.00% Full Consolidation Full Consolidation
Iraq Holding Limited4
100.00% 100.00% Full Consolidation Full Consolidation
Global Telecom Finance SCA 100.00% 100.00% Full Consolidation Full Consolidation
Telecom Holding Canada (Malta) Limited
5 100.00% 100.00% Full Consolidation Full Consolidation
International Telecommunications Consortium Limited
50.00% 50.00% Proportionate Consolidation
Equity Consolidation
Sawyer Limited 100.00% 100.00% Full Consolidation Full Consolidation
Global Telecom Oscar SA 100.00% 100.00% Full Consolidation Full Consolidation
Telecom Management Group Limited 100.00% 100.00% Full Consolidation Full Consolidation
Global Telecom One S.à.r.l 100.00% 100.00% Full Consolidation Full Consolidation
Waseela Microfinance Bank Limited 100.00% 100.00% Full Consolidation Full Consolidation
Cortex for Services & Consultations SAE
100.00% 100.00% Full Consolidation Full Consolidation
1. Direct and Indirect stake through Moga Holding Limited and Oratel. 2. Telecom Ventures Limited owns 100% of Sheba Telecom which operates under the trade name banglalink. 3. Direct and indirect stake through International Telecommunications Consortium Limited. 4. Iraq Holding Limited owns 100% of Orascom Telecom Iraq, which sold Iraqna in December 2007. 5. The holding company for GTH’s Share in Globalive, which has been accounted for under the equity method.
Global Telecom Holding 3Q14 | 17
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 and 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 customer is considered churned (removed from the customer 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 customer 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 and international outgoing traffic originated by customers (on-net, to land line & to other operators). Also, this includes incoming traffic to customers from landline or other operators.
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 ongoing performance. Management uses these measures to evaluate the Group’s operational results and trends.
Contact Information Investor Relations Mamdouh Abdel Wahab Head of Investor Relations Email: [email protected] Tel: +202 2461 5120 Fax: +202 2461 5055 Website: www.gtelecom.com
Disclaimer 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 customer 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 Global Telecom Holding’s business or acquisition strategy or the occurrence of unanticipated events.