The Egyptian investment in North Korea surprised many. But Naguib Sawiris expressed confidence when I heard him talk about it in Barcelona a few years back. Apparently making good profits was possible, but what value are profits that cannot be repatriated?
The Egyptian operator rolled out North Korea’s sole mobile network in 2008 as a joint venture with the state-owned Korea Post and Telecommunications Corporation (KPTC). Orascom owns 75% of Koryolink, which has 3 million subscribers. The Korean operator posted a profit of $270 million before tax and depreciation in 2014, and is valued at around $832 million.
However, Koryolink has been a source of problems for Orascom – the Egyptian operator had a hard time repatriating profits in 2014 due to international sanctions as well as domestic currency restrictions. In a November stock market filing, Orascom has now revealed that it has written off the unit.