Taxes eat through Mobinil profits THE EGYPTIAN company for mobile services Mobinil suffered a net loss of LE108.5 million in the second quarter of 2011, as a consequence of the impact of a new tax regime. Without the tax rate, the company would have made net earnings of LE80.1 million, compared to LE381 million in the same quarter of 2010. Meanwhile, Mobinil's total revenues grew by eight per cent quarter-on-quarter on the back of the improved business environment and robust growth in broadband revenues, following the country's 25 January uprising. Mobinil's total number of subscribers grew to 30.541 million, while realising net subscriber additions of only 183,000 in the second quarter of 2011, a minimal improvement from 130,000 in the first quarter. More generally, the total number of mobile phone subscribers in Egypt grew to 78.2 million in June 2011, compared to 70.6 million subscribers at the end of 2010, an increase of 10.7 per cent. Vodafone Egypt beat its competitors, taking 42.2 per cent of the total number of subscribers, followed by Mobinil with 39.1 per cent and then Etisalat-Misr with 17.7 per cent. No deal here LEADING private equity firm Citadel Capital confirmed that its talks for a stake sale to the Dubai-based private equity company Abraaj Capital have ended with no agreement. Citadel says that its main stakeholder, Citadel Capital Partners, did not reach any agreement with Abraaj, on the grounds that the proposed deal would not maximise shareholder value. Meanwhile, Abraaj announced the termination of acquisition negotiations in a statement. But it did not exclude the possibility of resuming the deal in future "should performance, deal terms and/or circumstances change". Lecico plant shutdown CERAMIC tiles and sanitary ware producer Lecico Egypt announced it has had to close its factories in Khorshid until further notice due to a workers' strike which began on the morning of 26 July. Meanwhile, the company's plants in Borg Al-Arab, Lebanon and France continue to function as normal, as are its other warehouses and distribution points in Egypt. Lecico's foreign subsidiaries in the UK, France, Lebanon, South Africa, Poland, Algeria and Saudi Arabia are continuing to trade out of stock as they have over recent weeks. Lecico's production from Khorshid accounts for 30 per cent of the company's total sanitary ware production and 74 per cent of its total tile production. The company is expected to be fully operational again in August when its factory in Borg Al-Arab becomes fully utilised. Spokespersons for the company added that the plants would remain closed indefinitely, until labour issues are resolved. The ongoing sit-in started on 26 July. "The closure would only impact overall top-line expectations should it take too long to settle the dispute," according to a statement by Beltone Financial. Meanwhile, the current strike might lead Lecico's other plant workers in Borg Al-Arab to do the same, added Beltone, which would have an impact on much of the rest of the company's capacity. A new Egytrans contract LOCAL shipping company Egytrans has signed a final contract with Hyup-jin, a South Korean-based shipping company, for a total value of LE40 million. According to the contract, Egytrans will transport on behalf of the Korean company a huge boiler to be used in Al-Sokhna Electricity Station. According to CI Capital, the two companies signed a memorandum of understanding stating that the project will run through the first quarter of 2013. CI Capital considers the news positive "as one of the main future key drivers for Egytrans are the expected boosts in the projects line of business." Reshuffling EGX30 THE CONSTITUENTS of the market's main index EGX30, the 30 most actively traded companies were changed on Monday as per the index's semi-annual maintenance. Nine companies were added to the benchmark: Al-Baraka Bank Egypt, Alexandria Mineral Oils Company, Amer Group Holding, Arab Gathering Investments, Ceramic & Porcelain, Giza General Contracting, Sidi Kerir Petrochemicals, Sinai Cement, and United Housing and Development. These companies will replace the following nine companies: Arab Polivara Spinning & Weaving, Arabia Investments Development Financial Investment Holding Company, Egypt for Poultry, Egyptians Housing Development & Reconstruction, Cairo Housing, Natural Gas & Mining Project (Egypt Gas), Nile Cotton Ginning, Sharkia National Food, and South Valley Cement. FDIs nose-dive EGYPT'S foreign direct investment (FDI) fell 124 per cent in the first quarter of 2011, ending March, compared to its value in the previous quarter ending on December 2010, due to the instability in the political and economic scenes following the toppling of Mubarak's regime. According to figures released by the Central Bank of Egypt, FDIs registered a net outflow of $163.6 million during that period, compared to net inflows of $656 million in the last quarter of 2010, and $1.7 billion in the same quarter of 2010. The EU was the largest investor during the quarter with a share of $1.14 billion, followed by Arab countries and the US with investments of $379 million and $167 million respectively. Two new gas discoveries LAST week witnessed the discovery of two natural gas wells in the River Nile Delta and the Mediterranean Sea, boosting Egypt's overall reserves by 194 billion cubic feet of gas and two million barrels of condensates. According to Bloomberg news agency, Egypt holds Africa's third largest gas reserves, with 78 trillion cubic feet (2.19 trillion cubic metres). The two new finds represent 0.2 per cent increase to Egypt's gas reserves. Egypt produces about six billion cubic feet of gas and 10.4 million barrels of condensates daily. Domestic gas consumption in the second quarter of 2011 was 429 billion cubic feet, according to the Ministry of Petroleum.
