AlembicHC has slashed the price target on shares for Egypt’s Mobinil by 21 percent to 103 Egyptian pounds. It comes after reports of lower margins and higher leverage, non-cash charges and taxes.
“We expect 2011 net profit to drop 80 percent,” the brokerage firm, which backed its underweight rating, said in a press release.
Last week, the Egyptian telecom operator reported a second-quarter net loss, citing political unrest following the toppling of President Hosni Mubarak, which has hit Egypt’s tourism and other businesses hard in recent months.
The firm wrote in the release that it expects Mobinil shares to be “under pressure until after it declares its third-quarter results, which could be hit hardest because of the boycott.”
Some are calling for a boycott of Mobinil over a row about a cartoon posted by Naguib Sawiris, chairman of Orascom Telecom, which they deemed to be offensive to Islam.
Orascom jointly owns Mobinil with France Telecom.