UPDATE 1-Sonatel profits drop as Mali tax break ends

Thu Aug 11, 2011 1:55pm EDT

* Net profits down 20 pct, revenues rise

* Mali ends corporate tax holiday

* Company sees continued revenue growth in H2 (Adds details, quotes)

By Richard Valdmanis

DAKAR, Aug 11 (Reuters) - Senegalese telecommunications group Sonatel said on Thursday net profits dropped by 20 percent during the first half of 2011 due largely to the end of a tax holiday it enjoyed in Mali, though revenues rose.

Net profits totalled 75.4 billion CFA francs ($164 million) during the period, from 94.5 billion CFA a year earlier, the company said in a release.

The company said it had anticipated the effect of the tax and that it would not impact its dividend schedule.

Sonatel, part owned by France Telecom, operates as Orange Mali in Mali, where it competes only with Maroc Telecom's Malitel SA. Mali's government is seeking to grant a third GSM mobile telecommunications licence by the end of the year.

Sonatel's net revenues during the first half of 2011, meanwhile, rose by 5.7 percent to 312.25 billion CFA francs "despite the impact of unfavourable fiscal measures, strong competition, and the unfavourable exchange rate of the Guinean franc," it added.

Sonatel's market share rose in Guinea and Guinea Bissau, but declined in its traditional strongholds Senegal and Mali, where competition is rising, it said.

Sonatel said it expects revenues to continue to post growth through the rest of 2011 as it expands its networks in Mali, Guinea and Guinea Bissau. ($1=459.708 CFA Francs) (Reporting by Richard Valdmanis; Editing by Bate Felix and Mike Nesbit)

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