Global Telecom
GTHE
GTHE
Beltone Financial issued a report on Global Telecom Holding (GTH), maintaining its fair value estimate at USD4.59/GDR, and placing a Buy recommendation on the stock.
GTH posted a net loss of USD178 million versus a loss of USD28 million in 2Q2013 and a profit of USD38 million in 1Q2014. The results were negatively impacted by a forex loss of USD109 million, interest expense of USD151 million, and an impairment of USD22 million relating to Telecel Globe in Africa. Revenues in 2Q2014 were negatively impacted on an annual basis due to intense competitive pressure in Algeria and Pakistan (the holding’s highest revenue generators). However, this was slightly offset by strong revenue growth in Bangladesh, which was driven by higher voice, VAS (value-added service) revenue, and a 10% increase in total customer base. Total consolidated EBITDA in 2Q2014 declined 11.2% y-o-y and 1.6% q-o-q, missing our estimates by 2.7% and negatively impacted by lower revenues and higher network- and customer-associated costs in Algeria and Pakistan, according to Beltone.
It added that revenues in Bangladesh grew 9.0% y-o-y and 5.3% q-o-q to USD141 million driven by continued focus on the mobile data segment and higher voice, interconnection, and VAS revenues. EBITDA during the quarter grew 14% y-o-y and 10.1% q-o-q to USD54 million on the back of strong revenue growth and opex optimization, positively impacting the unit’s profitability margins.
Djezzy launched 3G services in Algeria in July 2014 in seven provinces including the largest four in terms of population. The company also launched 3G services in eleven Pakistani cities in July 2014 and is focusing on expanding its 3G footprint in Bangladesh with 2,100 3G sites in 62 districts of 64.
“Despite the weak quarter we are overall positive on GTH as it introduced 3G services in its main three markets, boosting revenues from the data segment and enhancing EBITDA margins in the coming quarters. We also believe Djezzy will now be able to defend its market share as a result of launching 3G services, maintaining it at the mid-50% level,” said Beltone.
Beltone expects GTH to grow revenues by a CAGR of 6.7% to USD4.6 billion in FY2018 and believes the company will maintain its strong EBITDA margin at the mid-40% level throughout our forecast period. It also expects net profit to grow by a CAGR of 19.0% to USD424 million throughout our forecast period.
GTH posted a net loss of USD178 million versus a loss of USD28 million in 2Q2013 and a profit of USD38 million in 1Q2014. The results were negatively impacted by a forex loss of USD109 million, interest expense of USD151 million, and an impairment of USD22 million relating to Telecel Globe in Africa. Revenues in 2Q2014 were negatively impacted on an annual basis due to intense competitive pressure in Algeria and Pakistan (the holding’s highest revenue generators). However, this was slightly offset by strong revenue growth in Bangladesh, which was driven by higher voice, VAS (value-added service) revenue, and a 10% increase in total customer base. Total consolidated EBITDA in 2Q2014 declined 11.2% y-o-y and 1.6% q-o-q, missing our estimates by 2.7% and negatively impacted by lower revenues and higher network- and customer-associated costs in Algeria and Pakistan, according to Beltone.
It added that revenues in Bangladesh grew 9.0% y-o-y and 5.3% q-o-q to USD141 million driven by continued focus on the mobile data segment and higher voice, interconnection, and VAS revenues. EBITDA during the quarter grew 14% y-o-y and 10.1% q-o-q to USD54 million on the back of strong revenue growth and opex optimization, positively impacting the unit’s profitability margins.
Djezzy launched 3G services in Algeria in July 2014 in seven provinces including the largest four in terms of population. The company also launched 3G services in eleven Pakistani cities in July 2014 and is focusing on expanding its 3G footprint in Bangladesh with 2,100 3G sites in 62 districts of 64.
“Despite the weak quarter we are overall positive on GTH as it introduced 3G services in its main three markets, boosting revenues from the data segment and enhancing EBITDA margins in the coming quarters. We also believe Djezzy will now be able to defend its market share as a result of launching 3G services, maintaining it at the mid-50% level,” said Beltone.
Beltone expects GTH to grow revenues by a CAGR of 6.7% to USD4.6 billion in FY2018 and believes the company will maintain its strong EBITDA margin at the mid-40% level throughout our forecast period. It also expects net profit to grow by a CAGR of 19.0% to USD424 million throughout our forecast period.
Source:
Mubasher
