Orascom Investment Holding S.A.E

Interim / Quarterly Report • Oct 12, 2020

National Storage Mechanism | Additional information

RNS Number : 7687B

Orascom Investment Holding S.A.E

12 October 2020

Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/7687B_1-2020-10-12.pdf

Orascom Investment Holding S.A.E.

Condensed Interim Consolidated Financial Statements (IFRS) Together with the review report

Nine-month period ended September 30, 2019

Review Report on Condensed Interim Consolidated Financial Statements

To: The Board of Directors of Orascom Investment Holding (S.A.E)

Introduction

We have performed a review for the accompanying condensed interim consolidated statement of financial position of Orascom Investment Holding (S.A.E) as of September 30, 2019, and the related condensed interim consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows for the nine-month period then ended, and a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and fair presentation of these condensed interim consolidated financial statements in accordance with International Accounting Standard No. (34) "Interim Financial Reporting". Our responsibility is to express a conclusion on these condensed interim consolidated financial statements based on our limited review.

Scope of Review

Except as explained in the following paragraph, we conducted our review in accordance  with Egyptian Standard on Review Engagements 2410, "Review of Interim Financial Statements Performed by the Independent Auditor of the Entity." A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters in the Company, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Egyptian Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on these condensed interim consolidated financial statements.

Base of qualified conclusion

As mentioned in detail in note no. (10), the Company's investment in Sarwa Capital -an associate- acquired during the last year and accounted for by the equity method, is carried at USD 103,141 thousands on the interim consolidated statement of financial position as at September 30, 2019, and the Company's share of Sarwa Capital's net income of USD 4,939 thousands, included in Company's condensed interim consolidated statement of profit or loss and other comprehensive income for the period then ended. The management didn't provide us with the financial information prepared in accordance with IFRSs, accordingly, We were unable to audit the carrying amount of the Company's investment in Sarwa capital as at September 30, 2019, and the Company's share of Sarwa Capital 's net income for the period then ended. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.

Conclusion

Based on our review, except for the possible effects of such adjustments, as might have been determined to be necessary had we performed procedures to address the items set out above, nothing has come to our attention that causes us to believe that the accompanying condensed interim consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the company as at September 30, 2019, and of its consolidated financial performance and its consolidated cash flows for the nine-month period then ended in accordance with International Accounting Standard No. (34) "Interim Financial Reporting".

Emphasis of matter paragraph

Without considering the following as qualifications:

As mentioned in detail in note no. (10), the Company has a significant influence in its investee "Koryolink" in North Korea, the investment is amounting to approximately USD 38 million as of September 30, 2019, Which the Company classified as investments in associate. Considering that Koryolink is operating under an international ban, operational and financial restrictions imposed by the international community, which lead to difficulties in transferring profits abroad and repatriate the funds to their home country.

KPMG Hazem Hassan Public accountants and consultants

Cairo October 1, 2020

ORASCOM INVESTMENT HOLDING
(S.A.E)
Condensed interim consolidated statement of financial position as of
**Restated
(in thousands of US dollars)	Note	September 30, 2019	December 31, 2018
Assets
Property and equipment	11	76,398	80,941
Intangible assets and goodwill	11	29,368	33,851
Investment property	12	59,056	64,290
Equity-accounted investees	10	141,000	123,439
Other assets	17	11,252	13,224
Other financial assets	13	10,295	14,086
Total non-current assets		327,369	329,831
Inventories Trade receivables Other financial assets                                                                          13 Other assets                                                                                         17 Cash and cash equivalents                                                                   14		438 64,468 3,438 13,119 125,587	413 53,269 105,126 11,114 106,565
Total current assets		207,050	276,487
Total assets		534,419	606,318
Equity and liabilities Share capital                                                                                        15 Reserves Retained earnings		366,148 (148,455) 59,574	366,148 (160,523) 65,216
Equity attributable to owners of the company		277,267	270,841
Non-controlling  interests		18,491	18,738
Total equity		295,758	289,579
Liabilities Borrowings                                                                                          16 Other liabilities                                                                                    18 Deferred tax liabilities		52,945 21,069 14,238	58,803 25,844 15,265
Total non-current liabilities		88,252	99,912
Borrowings                                                                                          16 Trade payables and other liabilities                                                     18 Tax liabilities- income tax Provisions                                                                                          19		27,375 89,904 7,111 26,019	111,322 74,988 7,476 23,041
Total current liabilities		150,409	216,827
Total liabilities		238,661	316,739
Total Equity and Liabilities		534,419	606,318

Chief Financial Officer               D                                                 Executive Chairman and Managing Director

Khalid Ellaicy                                                                                               Naguib Sawiris

Review report 'attached'

The accompanying notes from (1) to (24) are an integral part of these condensed interim consolidated financial statements.

** Restatement to correct net losses for the year ended December 31, 2018 for one of OIH's subsidiary (Note No. 24).

1

ORASCOM INVESTMENT HOLDING (S.A.E)

Condensed interim consolidated statement of profit or loss and other comprehensive income for

(in thousands of US dollars, except per share amounts)               Note

The nine- month period             The three- month period

Continuing operations

Operating revenues                                                                  6

Other income

Purchases and services costs                                                     7

Other expenses Personnel cost

Depreciation and amortization

Gains from disposal of non-current assets

Operating profit / (loss)

Finance income                                                                      8

Finance cost                                                                          8

Net (losses) from foreign currency translation                               8

Share of profit of equity - accounted investees                           10

Net impairment  in equity-accounted investees

(loss) / profit before income tax

Income tax                                                                            9

(Loss) for the period from continuing operations

Discontinued operations

Profit / (loss) from discontinued operations, net of tax

(Loss) / profit for the period

Other comprehensive income / (loss):

Items that may be subsequently reclassified to profit or loss:

Debt investments at FVOCI - net change in fair value Foreign operations - foreign currency translation differences Total other comprehensive income for the period

Total comprehensive income for the period (Loss) / Profit for the period attributable to: Owners of the Company

Non-controlling interests

(Loss) / profit for the period

Total comprehensive income for the period attributable to:

Owners of the Company Non-controlling interests

Total comprehensive income for the period

(Losses) per share from continuing operations (basic and  diluted)             20

(in USD per share)

Earnings / (Losses) per share from discontinued operations (basic and diluted)           20

(in USD per share)

Chief Financial Officer	D	Executive Chairman and Managing Director
Khalid Ellaicy		Naguib Sawiris

The accompanying notes from (1) to (24) are an integral part of these condensed interim consolidated financial statements.

ORASCOM INVESTMENT HOLDING (S.A.E)

Condensed interim consolidated statement of changes in equity for the nine-months period ended September 30, 2019

(in thousands of US dollars) As of December 31, 2017, as presented Restatement for the effect of IFRS 9, IFRS 15 and IFRS 16 As of January 1, 2018, restated Comprehensive income / (loss) (Loss) for the period Other comprehensive income / (loss) Total comprehensive income / (loss) for the period Acquisition of subsidiary with NCI	Share capital 366,148 - 366,148 - - - -	Legal          T reserve 84,373 - 84,373 - - - -	ranslation reserve (205,414) - (205,414) - (50,345) (50,345) -	Other reserves 10,367 - 10,367 - (197) (197) -	Retained earnings 19,716 (350) 19,366 (50,602) 110,076 59,474 -	Total c 275,190 (350) 274,840 (50,602) 59,534 8,932 -	Non-           Total equity ontrolling Interests 27,528            302,718 (312)                (662 27,216            302,056 (126)            (50,728 (2,268)             57,266 (2,394)               6,538 2,287               2,287
Transferred to legal reserve	-	1,710	-	-	(1,710)	-	-	-
Total	-	1,710	-	-	(1,710)	-	2,287	2,287
As of September 30, 2018           366,148     86,083         (255,759)			10,170	77,130	283,772	27,109	310,881

(in thousands of US dollars) As of January 1, 2019 (As Issued) ** Restatement on previous years Balance as at January 1, 2019- Restated** Comprehensive income / (loss) (Loss) for the period Other comprehensive (loss) Total comprehensive income / (loss) for the period Revaluation of derivatives-put option	Share capital 366,148 - 366,148 - - - -	Legal                  T reserves 86,078 - 86,078 - - - -	ranslation reserves                     r (256,076) 2,213 (253,863) - 12,293 12,293 -	Other                    R eserves 7,262 - 7,262 - (253) (253) 313	etained earnings 67,429 (2,213) 65,216 (5,471) - (5,471) -	Total                     Non-           Total equity controlling Interests 270,841               18,738                        289,579 -                     -                     - 270,841               18,738                        289,579 (5,471)                 (895)                         (6,366 12,040               (1,971)                       10,069 6,569               (2,866)                     3,703 313                  137                      450
Disposal of subsidiary with NCI	-	-	-	(456)	-	(456)	2,482		2,026
Transferred to legal reserve	-	171	-	-	(171)	-	-		-
Total                                                                                                                     -                 171                                                                                                                           -																			(143)	(171)	(143)	2,619	2,476
As of September 30, 2019           366,148     86,249                (241,570)				6,866	59,574	277,267	18,491		295,758

Chief Financial Officer              D                                                                                                                           Executive Chairman and Managing Director

Khalid Ellaicy                                                                                                                                                                     Naguib Sawiris

The accompanying notes from (1) to (24) are an integral part of these condensed interim consolidated financial statements.

** Restatement to correct net losses for the year ended December 31, 2018 for one of OIH's subsidiary (Note No. 24).

ORASCOM INVESTMENT HOLDING (S.A.E. )

Condensed interim consolidated statement of cash flows for the nine-months period ended September 30,

(in thousands of US dollars)  Continuing  operations Operating activities

(Loss) / profit for the period before income tax Adjustments for:

Depreciation and amortization Finance cost

Finance income

Net losses from foreign currency translation (Gains) from disposal of non-current assets Share of profit of equity - accounted investees Net impairment in equity-accounted investees

Change in provisions

Changes in current assets included in working capital Changes in current liabilities included in working capital Cash flows provided from / (used in) operating activities Income tax paid

Dividends paid to employees Interest received

Net cash flows provided from / (used in) operating activities Investing activities

Purchase of property and equipment and intangible assets Net payment for other financial assets

Proceeds from sale of property and equipment Proceeds from disposal of other financial assets Net cash received from subsidiaries aquired Net cash flows (used in) investing activities Financing activities

Interest paid

Proceeds from non-current borrowings Net payments for financial liabilities Proceeds from other financial assets

Cash received form disposal of subsidiaris without change in control Payment for non-controlling interest in equity-accounted investees Net cash flows provided from financing activities

Net change in cash and cash equivalents during the period from continuing operations   Discontinued operations

Net cash flows provided from operating activities Net cash flows provided from investing activities  Net cash flows provided (used in) investing activities

Net cash flows provided from discontinued operations

Net change in cash and cash equivalents during the period

Cash and cash equivalents at the beginning of the period

Effect of exchange rate flactuation on cash and cash equivalents

Cash and cash equivalents at the end of the period

Chief Financial Officer                                                             Executive Chairman and Managing Director Khalid Ellaicy                                                                                                             Naguib Sawiris

The accompanying notes from (1) to (24) are an integral part of these condensed interim consolidated financial statements.

1.   General information

Orascom Investment Holding S.A.E. ("OIH" or the "Company") is a joint stock company with its head office in Cairo, Egypt. The Company was established on November 29, 2011, (the "inception") and until this date the businesses of the Company were performed under various entities which were controlled by Orascom Telecom Holding, S.A.E. ("OTH"). As part of a larger transaction pursuant to which VimpelCom Ltd had acquired OTH, its shareholders agreed to affect the demerger, whereby, OTH was split into two companies, OTH and the Company ("Demerger"). The Demerger resulted in the transfer of certain telecom, cable and media and technology assets (the "OIH Assets") to the Company.

The Company and the OIH Assets (together the "Group") are a mobile telecommunications business operating in high growth emerging markets in the Middle East, Africa and Asia. The Company is a subsidiary of Orascom Telecom Media and Technology Investments S.à.r.l. (the "Ultimate Parent Company").

The Company's shares are listed on the Egyptian Stock Exchange and its {GDRs are listed on the London Stock Exchange}.

The information presented in this document has been presented in thousands of United States Dollar ("US$"), except earnings per share and unless otherwise stated.

The condensed interim consolidated financial information as of and for the period ended September 30, 2019, were approved for issuance by the board of directors on October 1, 2020.

2.   Statement of compliance

These condensed interim consolidated financial statements as of September 30, 2019, have been prepared in accordance with IAS 34 "Interim Financial Reporting". As permitted by IAS 34, the Company has opted to prepare a condensed version as compared to the consolidated financial statements as of December 31, 2018. The condensed interim consolidated financial statements do not include all of the information required for the full annual financial statements, and should be read in conjunction with the consolidated financial statements for the year ended December 31, 2018, which have been prepared in accordance with International Financial Reporting Standards (IFRSs).

The condensed interim consolidated financial statements are not the statutory financial statements of the Company, as the statutory financial statements are prepared in accordance with the Egyptian Accounting Standards (EAS).

2.1  Significant accounting policies

The accounting policies adopted for the preparation of the condensed interim consolidated financial information are consistent with those used in the consolidated financial statements as of and for the period ended December 31, 2018.

2.2  Application of new and revised International Financial Reporting Standards ("IFRSs")

2.2.1 New currently effective requirements

Effective date	New standards or amendments
January 1, 2019	IFRIC 23 Uncertainty over Income Tax Treatments
January 1, 2019	Prepayment Features with Negative Compensation (Amendments to IFRS 9)
January 1, 2019	Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28)
January 1, 2019	Plan Amendments, Curtailment or Settlement (Amendments to IAS 19)
January 1, 2019	Annual Improvements to IFRSs 2015-2017 Cycle (Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23)

The Group is currently assessing whether these changes will affect the consolidated financial statements in the period of initial application.

3.   Use of estimates

In preparing these interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements.

Changes in significant accounting policies

The accounting policies applied in these interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended December 31, 2018.

4.     Changes in significant accounting policies

The accounting policies applied in these interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended December 31, 2018.

5.     Segment reporting

The chief operating decision-maker has been identified as the board of directors of the Company. The board of directors reviews the Group's internal reporting in order to assess its performance and allocate resources, mainly from a geographical perspective, of the mobile telecommunication business. OIH management has determined the reportable operating segments according to the information analysed by the chief operating decision-maker as follows:

·      Investment property: investment properties relate to real estate property the Group owns in Sao Paolo, Brazil

·      GSM - Lebanon: relating to the management contract of the Lebanese mobile telecommunications operator Alfa which is owned by the Republic of Lebanon.

·      Cable: relating to the provision of direct broadband and high-speed connectivity to telecom operators, internet service providers and major corporations through submarine fibre optic cables.

·      Media & Technology: relating mainly to the provision of online advertising and content to corporate customer, mobile value-added services and software development and hosting of corporate clients.

·      Other: relating to the Group's equity accounting investment and income and expenses related to OIH.

The Group reports on operating segments which are independently managed. The chief operating decision-maker assesses the performance of such operating segments based on:

·      Total revenue;

·      Adjusted EBITDA, defined as profit / (loss) for the period before income tax expense / (benefit), share of profit of equity investments, foreign exchange gain / (loss), finance cost, finance income, gain / (loss) from disposal of non-current assets, impairment charges and depreciation and amortisation;

·      Segment capital expenditure which is the total cost incurred during the period to acquire property and equipment and intangible assets other than goodwill.

The tables below illustrate the information provided to the chief operating decision-maker for the relevant periods.

Revenue and Adjusted EBITDA disclosure per segment for the nine-month period ended September 30, 2019 and September 30, 2018:

Marine cables Financial services Management fees Investment property Other

Total

Reconciliation of Adjusted EBITDA to profit before income tax for the nine-month period ended September 30, 2019 and September 30, 2018:

(in thousands of US$)	For the Period ended September 30, 2019	For the Period ended September 30, 2018
Adjusted EBITDA	9,599	11,239
Depreciation and amortization	(6,440)	(6,650)
Disposal of non-current assets	40	30
Financial income	471	4,708
Financial expense	(9,258)	(6,694)
Foreign exchange (loss)	(7,103)	(1,028)
Share of profit of equity investments	173,032	115,180
Impairment of associate	(168,100)	(115,180)
(Loss) / profit before income tax	(7,759)	1,605

Assets per segment

Financial Services Investment Property Marine cables Other

Total

Capital expenditure

The table below illustrates the capital expenditure incurred by each segment in the current and comparative period

	Nine-months ended September 30, 2019	Nine-months ended September 30, 2018
Marine cables	13,125	11,904
Financial services	38	571
Other	-	911
Total	13,163	13,386

6.   Revenues

(In thousand US$)	Nine-months ended September 30, 2019	Nine-months ended September 30, 2018	Three-months ended September 30, 2019	Three-months ended September30, 2018
Financial services	22,738	26,431	7,752	7,256
Marine cables	33,313	32,916	10,347	11,571
Management contract -fees	5,368	5,400	1,793	1,799
Investment property	2,582	2,656	853	810
Total	64,001	67,403	20,745	21,436

Disaggregation of revenue from contracts with customers

(In thousand US$)

For the Nine months ended September 30,

Primary geographical markets

Brazil US

Pakistan Lebanon Egypt

Major service Lines Rental revenues Management Fees - Funds Performance Fees - Funds

Other Financial management Success Fees

Retainer Fees Brokerage Revenues Cable rental

GSM Management Agreement

Timing of revenue recognition Products transferred at point of Services transferred over period of

67,40

7.    Purchases and services

(In thousand US$)

Rental of local network, technical sites and other leases

Customer acquisition costs

Purchases of goods/ materials and consumables

Band width cost

Maintenance costs

Utilities

Brokerage commissions

Advertising and promotional services

Consulting and professional services

Bank and post office charges

Insurance

Airfare

Accommodation, meals and per diem

IT supplies and expense

Sites expense

Security guards

Other service expenses

Total

8.  Net financing (cost) / income

(In thousand US$)

Three -months ended September, 2018

Interest income on deposits                                                            471                              4,708                                       135                             1,203 finance income                                                                              471                             4,708                                     135                            1,203 Interest expense on borrowings

Other interest expense and financial charges

Finance cost                                                                            (9,258)                          (6,694)                               (3,175)                         (2,041) Net foreign currency translation  (losses)                                       (7,103)                            (1,028)                                 (1,632)                               (933) Net foreign currency translation  (losses)              (7,103)         (1,028)                          (1,632)                                                                    (933)

(15,890)                           (3,014)                               (4,672)                         (1,771)

9.  Income tax expense

	Nine- month ended September 30, 2019	Nine - months ended September 30, 2018	Three - months ended September 30,2019	Three - months ended September, 2018
Current tax expense	4,293	2,807	1,593	(416)
Deferred tax	(471)	1,154	(440)	2,136
Total income tax expenses	3,822	3,961	1,153	1,720

10.      Equity-accounted investees

Details of investments in Associates is as follows:

(In thousand US$)	Country	%	September 30, 2019	December 31, 2018
Cheo JV Technology-Koryolink (10-1)	North Korea	75%	607,252	391,804
SARWA Capital (10-2)	Egypt	30%	103,141	89,042
Electronic Fund Administration Services	Egypt	20%	18	18
International Fund Administration Services	Egypt	20%	33	37
Axes Holding company	Egypt	33.9%	627	625
Deduct: Impairment			(570,071)	(358,087)
			141,000	123,439

(10-1) Koryolink

(In thousand US$) Assets Liabilities
Net assets	1,682,383	1,392,311
(In thousand US$)
Revenues Total expense
Net profit after tax
Group's share of profit of associates

The Group's investments in North Korea related for 75% of the voting rights in the local telecom operator Koryolink. The accounting treatment has been modified during the period ended September 30, 2015, through recognizing it as an investment in associates instead of investment in subsidiaries. Thus, in light of the increase of the restrictions, financial and operating difficulties facing Koryolink due to  the  international  sanction imposed by the international community including the United States, the European Union and the United Nations. These sanctions have the effect of restricting financial transactions and the import and export of goods and services, including goods and services required to operate, maintain and develop mobile networks, the absence of a free-floating currency exchange market in North Korea, whereas the Group's management has no exchange rate available other than the official exchange rate announced by the Central Bank of North Korea, other than launching a competing local telecom operator wholly owned by the North Korean Government.

On September 11, 2017, the United Nations Security Council issued a resolution obliging member states of the United Nations to pass laws prohibiting joint ventures and existing partnerships with the North Korean Republic unless approval is obtained to continue such joint ventures. At the present, the Group's management submitted an official request through the Government of the Arab Republic of Egypt in order to be excluded from adhering to the said resolution.

On December 26, 2018, the request to the Security Council Committee established to follow up the implementation of sanctions on North Korea was approved, with the exception of Koryolink, to ban foreign investment in North Korea and to allow Orascom Investment Holding to continue its activities in North Korea. And Consider the company as a telecommunications infrastructure company offering a public service.

The following table presents the movement on the investment of koryolink during the period:

(In thousand US$)	Nine-months ended September 30, 2019	Nine-months ended September 30, 2018
Beginning balance	34,397	235,752
Group's share of profit of associates	168,100	115,180
Currency translation differences	3,411	(4,395)
Impairment of group's share of profit of associates	(168,100)	(312,318)
Ending balance	37,808	34,219

(10-2) Sarwa Capital

On December 20, 2018, the Company purchased number of 216,032,608 share from shares of Sarwa capital, which represents 30% of total equity by price per share 7.36 by total price EGP 1,590 million and it was financed by the contract related to open credit facility with bank Audi by amount of USD 90 million during December 2018.

(In thousand US$)	September 30, 2019	December 31, 2018
Assets	247,170	196,888
Liabilities	(128,818)	(103,666)
Net assets	118,352	93,222
(In thousand US$)	Nine-months ended September 30, 2019	Nine-months ended September 30, 2018
Revenues	156,160	142,232
Total expense	(138,973)	(127,387)
Net profit after tax	17,187	14,845
Holding share of net profit	16,464	13,991
Share of profit in associates	4,939	-

(In thousand US$)	September 30, 2019
Opening balance	89,042
Share of profit of associates	4,939
Currency translation differences	9,160
Ending balance	103,141

11.  Property and equipment and intangible assets

The details of the property & equipment and intangibles acquired and disposed of during the current and comparative period are detailed in the following table:

	Property and equipment	Intangible assets
Balance as of January 1, 2019	80,941	33,851
Additions	12,539	624
Disposals	(273)	--
Depreciation and amortization	(5,088)	(342)
Change in scope	(1,814)	(6,686)
Currency translation differences	(9,907)	1,921
Balance as of September 30, 2019	76,398	29,368
Balance as of January 1, 2018	139,482	48,568
Additions	4,211	9,175
Disposals	(137)	-
Depreciation and amortization	(4,874)	(677)
Depreciation and amortization included in discontinued operations	(130)	-
Adjustments arising from adoption of IFRS 16	11,886	-
Translation of foreign operations	(10,435)	(1,432)
Change in scope of consolidation	(53,685)	(11,410)
Balance as of September 30, 2018	86,318	44,224

·     There is a pledged asset for Transworld equivalent to US$ 60 Million, in exchange for facilities related to marine cables SMW5.

12. Investment property

The investment property balance comprises of the value of seven floors owned by Victoire company in Brazil. The investment property is carried at its historical cost (with fair value US$ 64,021 thousand) on the date of acquisition.

(in thousands of US$)	September 30, 2019	December 31, 2018
Cost	69,993	82,067
Accumulated amortization and impairment	(5,703)	(5,094)
	64,290	76,973
Depreciation	(1,010)	(1,429)
Translation of foreign operations	(4,224)	(11,254)
As of end of period / year	59,056	64,290
Cost	65,338	69,993
Accumulated amortization and impairment	(6,282)	(5,703)

13. Other financial assets

(in thousands of US$) Financial receivables Restricted cash (13-1)

Financial assets at fair value through profit or loss (13-2)

Financial assets at fair value through OCI (13-3)

Total

13-1  Restricted cash

As of September 30, 2019                         As of December 31, 2018

(in thousands of US$)                      Non-current         Current            Total      Non-current           Current            Total

Pledged deposits

Cash on banks in North Korea

Total                                                                     6,798          1,970            8,768                   7,550        101,982             109,532

13-2  Financial assets at fair value through profit or loss

	September 30, 2019	December 31, 2018
Investments in Cash investments funds	944	816
Investments in investments funds	27	813
Treasury Bills	307	424
Total	1,278	2,053

13-3  Financial assets at fair value through OCI

	September 30, 2019	December 31, 2018
Egypt Opportunities Fund	2,019	2,252
EGX -30	499	420
Misr for Central Clearing Depository and Registry	472	429
Guarantee Settlement Fund	241	375
El Arabi for Investment	11	11
MENA Capital	167	172
BMG	6	-
(Less):
Impairment loss of financial assets at fair value through OCI	(166)	(166)
Total	3,249	3,493

14. Cash and cash equivalents

(in thousands of US$)	September 30,2019	December 31, 2018
Bank accounts and deposits	125,518	106,491
Cash on hand	69	74
Total	125,587	106,565

15. Share capital

The Company was incorporated On November 29, 2011, with an authorised share capital amounting to EGP 22 billion, equivalent to US$ 3.66 Billion, of which, the issued amounts to EGP 2,203,190,060, equivalent to US$ 366 Million distributed over 5,245,690,620 shares, each with a nominal value of EGP 0.42 par value each, according to the approvals of the General Authority for Investment and of the Extraordinary General Assembly of Orascom Telecom Holding (Demerging Company).

16. Borrowings

Liabilities to banks Finance lease liability * Other borrowings

The Group has adopted IFRS 16 starting January 1, 2018, which resulting the below new assets and liabilities together with the profit or loss effect as follows:

Right of use (ROU) of Assets	Period ended September 30,
ROU as January 1, 2019	10,101
Additions	1,227
Depreciation charge of the period	(862)
Currency translation differences	(623)
Balance as at September 30, 2019	9,843

Loans for Trans World associate

Borrowings balances include loans granted by the shareholders of Trans World Associate private to Trans World associate private (limited) Pakistan by an amount equivalent to USD 2.2 Million of which USD 1.4 M due within one year and USD 0.8 M due more than one year.

Borrowings also include loans obtained from banks amounted to US$ 26.1 million from which US$ 7.1 million due within one year and US$ 19 million due after more than one year.

Loan for the purpose of financing the acquisition of Victoire Group:

On September 28, 2015 the Company borrowed long-term loan from the subjected bank by a maximum amount

US$ 35 Million for the sole purpose of financing 50% of the purchase price of seven floors in the "Patio Malzoni Faria Lima Tower A" in Sao Paolo, Brazil through the direct or indirect acquisition of the shares of the following companies incorporated in Brazil: Victoire 2, Victoire 9, Victoire 11, Victoire 13, Victoire 17, Victoire 18, and Victoire 19. With a balance USD 33.3 million as at September 30,2019.

On October 18, 2017 Orascom Telecom, Media and Technology Holding company performed a reschedule agreement with bank Libano Francaise through which the loan amounted USD 33 million will be long term loan due on three instalments starts from October 2019 and ends October 2021.

On May 24, 2018 the pledge of the deposit amounted 36.2.3 M has been released and mortgage of the tower and pledge of Victoire BV company shares has been made in favour of Libano Francis bank.

Other credit facilities (Beltone financial holding company):

The credit bank facilities granted to one of Group components for financing the settlement of guarantee against payment concerning brokerage sector and these facilities are unsecured and bearing average interest market rate, In addition to the financing granted to the Holding Company during the period.

17. Other assets

(in thousands of US$)

Prepaid expenses Advances to suppliers

Receivables due from tax authority Employee loans

Assets from current tax Other non-trade receivables

Allowance for doubtful current assets

Total

18. Trade payables and other liabilities

(in thousands of US$)                                                          September 30, 2019                                            December 31, 2018

Trade payables

Capital expenditure payables Trade payables due to suppliers Customers credit balance

Trade payables to financial sector Other trade payables

Total trade payables Other liabilities

Prepaid traffic and deferred income

Due to local authorities Personnel payables Subscriber deposits Other credit balances Total other liabilities Total

19. Provisions

Provisions are recognised according to the best estimate of the amount expected to settle the present obligations, at the end of the reporting period, arising as result from the Group's operations and contractual relationships with third parties. Provisions recognised during the period are reported among other expenses in the statement of profit or loss and are subject to an annual review by management and are revised based on the most recent developments, negotiations and agreements with the relevant counterparties.

	2019	2018
As of January,1	23,041	20,723
Additions	2,739	3,892
Currency translation differences	2,269	(303)
Provision used	(2,030)	(6,142)
Change in the scope of consolidation	-	(223)
As of September	26,019	17,947

20.  (Losses) / earnings per share (basic and diluted)

Basic:

Basic earnings per share is calculated by dividing the (losses) / earnings attributable to equity holders of the Parent Company by the weighted average number of ordinary shares outstanding during the period.

Diluted:

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. During the period covered by the report, the Company did not have any dilutive potential ordinary shares and as such diluted and basic earnings per share are equal.

(Losses) per share from continuing operations - basic and diluted (in US$)

	Nine-months ended September 30, 2019	Nine-months ended September 30, 2018	Three-months ended September 30,2019	Three-months ended September 30, 2018
(Losses) attributable to equity holders of the Parent Company from continuing operations	(11,487)	(3,596)	(2,997)	(4,030)
Weighted average number of shares (in thousands of shares)	5,245,691	5,245,691	5,245,691	5,245,691
(Losses) / earning per share - basic and diluted (in US$)	(0.0022)	(0.001)	(0.0006)	(0.001)

Earning / (Losses) per share from discontinued operations - basic and diluted (in US$)

	Nine-months ended September 30, 2019	Nine-months ended September 30, 2018	Three-months ended September 30,2019	Three-months ended September 30, 2018
Earnings / (Losses) attributable to equity holders of the Parent Company from discontinued operations	6,016	(47,006)	6,471	(40,432)
Weighted average number of shares (in thousands of shares)	5,245,691	5,245,691	5,245,691	5,245,691
(Losses) / earning per share - basic and diluted (in US$)	0.0011	(0.009)	0.0012	(0.008)

21. Capital commitments

The capital commitments are provided in the table below:

	September 30, 2019	December 31, 2018
Property and equipment	1,288	5,214
Other	5,383	12,054
Total	6,671	17,268

The main capital commitments are related to property and equipment arising from the Group commitments of the installation of property and equipment related to the supply of marine communication cable, equipment, and technical equipment related to the contract of Trans World associates.

22. Contingent liabilities

The contingent liabilities, are represented in guarantees issued by the holding company and related to the activities of its subsidiaries, as follows:

Orascom Telecom, Media and Technology Holding

- A Letter of guarantee in favour of Lebanon Ministry of Telecommunication to guarantee Orascom Telecom Lebanon in the payment of any amount due by the selected participants amounting to US$ 40 Million valid until

December 31, 2019.

Transworld Associates (Subsidiary)

-     The amount equivalent to USD 28.8 thousand pounds held by the bank for the sake of the Higher Education Commission (HEC) until December 31, 2019.

-     There is a letter of credit amounting to USD 345 K in favour of Inbox Company valid until May 9, 2020.

23. Subsequent events

1.   The recent outbreak of the novel coronavirus (COVID-19) continues to impact the global economy and markets. Going forward the COVID-19 outbreak may negatively impact amongst others our supply chain, workforce, operations, demand of our end markets, and liquidity. Accordingly, The Management has set up a COVID-19 taskforce to develop and implement contingency plans, and we are closely and continuously evaluating the developments. We will take all necessary actions to keep our operations running and, most importantly, protect our employees, suppliers, customers and all other stakeholders. Based on our current knowledge and available information, we do not expect COVID-19 to have an impact on our ability to continue as a going concern in the foreseeable future.

2.   During January 2020, the Company made early payment of the full value of the loan related to direct or indirect acquisition of the shares of the companies that own the Brazil Building, the balance of the loan on December 31, 2019, amounted to 23,413 thousand dollar, as the shares were unpledged by the bank during January 2020.

3.   On February 27, 2020, the Board of Directors of Sarwa Capital Company proposed to distribute cash dividends to shareholders for the fiscal year ending December 31, 2019, with a total value of 117,759,480 EGP (US$ , the share of the profits will be 10 piasters per share, the Company's share of the dividends declared will be about 34.5 million Egyptian pounds before the tax on dividends.

4.   On December 2019, the Company's board of directors received a letter from the Lebanese Ministry of Communications regarding the non-renewal of the management contract concluded between Orascom Investment Holding Company and the Lebanese Ministry of Communications, due to the current events in Lebanon, the company was not handed over to the Lebanese Ministry of Communications, and the group has managed the Lebanese company till now with the same conditions as the old contract. During September 2020, the process of transferring the management of Alfa Company from Orascom Telecom Lebanon to the Ministry of Communications was completed, in implementation of the Cabinet Resolution issued on May 5, 2020 and after fulfilling all the requirements of the management contract.

5.   During April 2020, Beltone Financial Holding, which is owned by Orascom Investment Holding Company by 74.55%, has signed an agreement to sell its subsidiary Auerbach Grayson with a group of investors. All sales procedures will be terminated after obtaining the approval of the Financial Sector Authority in the United States of America.

6.   On July 9, 2020, the board of directors of the Company approved the detailed demerger plan of the company into two companies where the demerged company will be called "Oracom Investment Holding" (the demerged company) where it will include company's investments in companies that operate in different fields. The other company will be called "Orascom Financial Holding" (the new company) which will include the investments of the company in companies that operate in the financial-non-banking sector which are Beltone financial holding (subsidiary) and Sarwa capital (associate).

24. Reclassification of some comparative numbers:

During the nine-months ended September 31, 2019, the company reclassified the comparative figures of the retained earnings and translation reserve for subsidiaries in order to correct the translation of the net loss incurred by one of the group's subsidiaries for the year ended December 31, 2018.

Chief Financial Officer	Executive Chairman and Managing Director
Khalid Ellaicy	Naguib Sawiris

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

IR VLLBFBBLZFBQ