Revenue – USD768mn, +8% Y-o-Y, -3% Q-o-Q, -2% vs. EFGe EBITDA margin – 30.5%, -11.0pp Y-o-Y, -12.7pp Q-o-Q, -12.3pp vs. EFGe Net profit – USD7mn, +157% Y-o-Y, +18% Q-o-Q, +85% vs. EFGe   GTH’s 4Q16 net profit came in at USD7mn vs. our estimate of USD4mn, but the bottom-line was distorted by a few one-off items: i) USD66mn provision charge at the holding-company level for the Iraqna litigation; ii) gain on sale of Telecel Zimbabwe to the tune of USD21mn; and iii) FX gain of USD50mn. Excluding these items, earnings would have come in at USD4mn. Revenues for all three subsidiaries were broadly in line with our estimates, putting the total revenue for the quarter at USD768mn (-2% vs. EFGe). However, margins were quite disappointing, particularly for Pakistan and Bangladesh, resulting in a GSM margin (excluding holding-company costs) of 42.1% vs. our estimate of 46.2%. This was aggravated further by the provision for the Iraqna litigation (USD66mn), leading to a group margin of 30.5% vs. our estimate of 42.8%. Overall, we are disappointed in the numbers, and while we see some of the pressure as short-term only (such as Pakistan restructuring and integration costs), we still see some underlying weakness in Algeria that we are concerned about. We were positively surprised to see Pakistan paying a dividend of USD50mn for the first time in 11 years. Pakistan’s EBITDA margin fell to 37.3% vs. our estimate of 42.2% due to both, restructuring and integration costs; excluding these, Pakistan’s margin would have been 40.3%. GTH said the integration is well underway with unified on-net offers already offered by both merged entities (jointly rebranded to Jazz), while Warid subscribers were offered 3G in 30 cities and Mobilink subscribers were offered 4G in 17 cities. The company noted that synergies had reached cUSD78mn so far, owing to interconnect, site-sharing and marketing expenses. In Algeria, revenue continued to slide in line with our expectations (-17% Y-o-Y), while maintaining a stable EBITDA margin of 51.5%, in line with our estimate. Djezzy continued to witness subscriber churn and APRU erosion, a trend management expects to persist for some time. The recent lifting of the significant market player (SMP) status by the regulator should give Djezzy more flexibility in the market, in our view, but the increase in VAT causes important headwinds for its turnaround. In Bangladesh, revenue was in line, but EBITDA margin came in at a weak 37.6% vs. our estimate of 46.4%, mainly due to a focus on subscriber acquisition as well as 3G network expansion.   Key positives: Integration underway in Pakistan, with synergies at USD78mn, so far Pakistan operation paid a gross dividend of USD50mn to its shareholders Lifting of SMP status in Algeria   Key negatives: Ongoing subscriber churn and APRU erosion in Algeria Provision of USD66mn for Iraqna litigation In Algeria, there was an increase of VAT from 7% to 19% on data revenue and from 17% to 19% on voice revenue, and taxes on recharges from 5% to 7%.   Background on Iraq litigation: In February 2017, GTH received a court ruling concerning the Iraqna litigation. On 19 November 2012, Atheer Telecom Iraq Limited initiated English High Court proceedings against Orascom Telecom Iraq (OTIL) and GTH in relation to a dispute arising from the 2007 sale of Iraqna, OTIL’s Iraqi mobile subsidiary, to Atheer. Pursuant to the underlying share purchase agreement, Atheer was seeking declarations that OTIL and GTH are liable to indemnify it for certain tax liabilities. Atheer’s initial claim was for USD280mn, but later reduced to USD60mn. On 17 February 2017, the Court found OTIL and GTH liable to indemnify Atheer. The precise financial terms of the order, including costs and interest will be determined at a hearing on 1 March 2017. GTH intends to seek leave to appeal the final judgment; however, leave to appeal is discretionary and may not be granted. (Company disclosure, Omar Maher)   Global Telecom Holding: USD1.91 per GDR / EGP6.17 per share as of 27 February 2016, Rating: Buy, FV: USD2.93 per GDR / EGP10.48 per share, MCap: USD2,004 million, GLTD LI / GLTDQ.L