Telecom Egypt announced its business results for the financial period ending on June 30, 2023, according to the consolidated financial statements prepared in accordance with Egyptian accounting standards.
The most important indicators of the results of the first half of 2023
• Total consolidated revenues amounted to 28.1 billion pounds, achieving a growth of 38% compared to the same period of the previous year, driven by the increase in wholesale business units’ revenues by 75% compared to the same period of the previous year, as this increase constituted 71% of the total growth, followed by performance Al Mutamayez Retail Business Units.
• The company showed a growth in its customer base at the level of all services provided compared to the same period of the previous year, as the number of fixed-line subscribers and the number of fixed-broadband internet customers increased by 5% and 8%, respectively, while the number of mobile subscribers increased to 12.6 million customers Achieving a growth rate of 7% compared to the same period of the previous year.
• EBITDA reached EGP 12 billion, growing by 48% compared to the same period of the previous year, achieving a high profit margin of 43%, supported by the increase in revenues from high-margin services.
• The operating profit achieved, after excluding the effect of some non-operating elements, a growth of 54% compared to the same period of the previous year, as a result of the distinguished operational performance, which mitigated the impact of the 38% increase in depreciation and amortization costs.
• Net profit after taxes amounted to 6.7 billion pounds, while it reached 7 billion pounds after neutralizing the impact of some exceptional items, achieving a growth rate of 67% compared to the same period of the previous year, thanks to the strong operational performance and the increase in investment revenues, which mitigated the impact of the increase in costs financing.
• Capital expenditures for in-service assets amounted to 4.5 billion pounds, an increase of 55% compared to the same period of the previous year, representing 16% of total revenues, while cash capital expenditures amounted to 11.2 billion pounds – after excluding the effect of licensing and frequency expenses – with a ratio of capital expenditures to Sales up to 40%.
• Net debt reached 1.4 times EBITDA on an annual basis, which is the same ratio achieved in fiscal year 2022, although the total debt ballooned by 43% in light of the revaluation of liabilities as a result of the exchange rate change.
Mr. Mohamed Nasr, Managing Director and CEO of Telecom Egypt, commented on the results of the first half of 2023, saying: “The financial performance for the first half of 2023 is a reflection of the optimal business model developed by the company and its strong presence in the field of infrastructure. The infrastructure of international communications coincided with the continuous growth in data services for fixed and mobile customers and the broad base of experienced and efficient workers, which gives the company the flexibility necessary to achieve distinguished financial and operational performance in light of the current economic challenges.The company continued to achieve strong financial performance derived from the diversity of services it provides The company, which resulted in total revenues of 28 billion Egyptian pounds as a result of the increase in the services revenues of the wholesale business units, which is the main driver of growth in revenues, followed by the distinguished performance of the retail business units. We have succeeded in attracting a new segment of customers at the level of all services provided, which is a positive indicator of our efforts. Continuing to support our competitive position, the EBITDA margin achieved 43% and the operating profit achieved a growth of 45% compared to the same period in the previous year, while the net profit achieved a growth of 67% compared to the same period in the previous year after neutralizing the effect of some items the exceptional.”
He added, “Our profit margins remained strong despite the increase in costs, thanks to the excellent operating performance driven by the increase in infrastructure revenues in conjunction with our continuous efforts to rationalize expenses, which was evident through the recently signed local roaming agreement among other cost-effectiveness initiatives. In reaping more through the amended shareholders’ agreement with Vodafone, where the company received 2.1 billion pounds as dividends in July 2023, which was reflected in the total free cash flows to record 0.5 billion pounds for the first half of 2023, and we also expect an additional improvement in free cash flows During the third and fourth quarters of 2023, in light of the aforementioned distributions and supported by the continued strong performance and collection of cable project revenues achieved during this quarter, it should be noted that the company, in addition to paying its deferred obligations to suppliers, is taking a strategic approach to secure its future commitments from capital expenditures by paying Priority approval for some investment items in order to avoid any challenges that may arise in supply chains or any other economic challenges, which put some pressure on capital expenditures during the first half of 2023. The ratio of net debt to profit before interest, taxes, depreciation and amortization, on an annual basis, achieved stability compared to 2022 by 1.4 times despite the increase in total debt as a result of the revaluation of debt balances in foreign currency.
He added, “I firmly believe in the company’s strength and capabilities, so I am keen to constantly strive to implement the company’s future plans to become the regional hub for data traffic while achieving growth at the level of all other businesses. We have a great opportunity to continue to lead the data market and expand the mobile customer base, so we will spare no effort.” In continuing to develop our client-centric strategy, seeking every opportunity that enables us to maximize the utilization of our infrastructure, to maximize the wealth of our shareholders.