Revenue: EGP111mn, +74% Y-o-Y, +19% Q-o-Q, -3% vs. EFGe EBITDA margin: -49.4%, -306.0pp Y-o-Y, +252.8pp Q-o-Q, -22.6pp vs. EFGe  Net profit: EGP41mn, -87% Y-o-Y, -107% Q-o-Q, -70% vs. EFGe   OTMT’s 1Q16 earnings came in at a weak EGP41mn, missing our estimate of EGP137mn as the company impaired its share of profit from the North Korean operation, Koryolink, to the tune of EGP263mn, which we did not expect; our estimate for Koryolink’s contribution was EGP242mn. OTMT’s earnings were boosted by a FX gain of EGP167mn; excluding the FX gain, earnings would have reached a loss of EGP98mn, we calculate, which would have been broadly in line with our adjusted net loss estimate of EGP105mn excluding Koryolink’s profit. Results were weaker-than-expected at the operating level, despite revenue being in line with our estimate, as the EBITDA margin came in at a weak -49% versus our estimate of -27%, largely due to a weaker-than-expected loss at the ‘Others’ segment.   We reiterate our Sell rating on OTMT’s stock as we continue to see it as overvalued at the current price. Our breakup valuation suggests the bulk of the company’s value lies in its cash and its North Korea asset (Koryolink); when the company announced the deconsolidation of Koryolink in November 2015, we opted to remove it from our sum-of-the-parts valuation as we no longer believed OTMT could recover the value of the operation in case it had to dispose of it. We believe there is no concrete progress in the negotiations with the Korea Post and Telecommunications Corporation (KPTC) for a potential merger between Koryolink and the other state-owned operator, Kang Song NET. Moreover, OTMT said it is following up on certain arrangements made with its North Korean partner to ensure a better competitive environment as well as a potential easing in cash repatriation, but this remains contingent upon the government fulfilling its obligations, which we see no guarantee to. Hence, we believe there is no material easing in operating and financial restrictions in the country, which is a significant hindrance to the unit’s historical competitive advantage, in our view. (Earnings release, Omar Maher, Karim Riad)   OTMT: EGP0.61 as of 11 August 2016, Rating: Sell, FV: EGP0.53 per share, MCap: USD360mn, OTMT EY / OTMT.CA