Nomura cuts price target on Telecom

Nomura cut its price target on landline monopoly Telecom Egypt Co SAE citing lower long-term revenue growth expectations from the company.

The brokerage, which cut its price target on the stock to 18 Egyptian pounds from 19.90 Egyptian pounds, said it has reduced its expectations for the contribution from Vodafone Egypt.

Telecom Egypt, which owns a 45 percent stake in Vodafone's Egyptian mobile venture but does not have management control and only consolidates part of the profit from that business, posted a 15 percent drop in second-quarter net profit on Monday.

"Second-quarter retail revenues declined by 15.1 percent year-over-year, the worst decline in six quarters," Nomura said, adding that access and internet revenues were affected by promotions while voice revenue declined partly hurt by a large number of customer disconnections.