Telecom Egypt announced its Q2 2019 results ending 30 June 2019. The operator registered revenue growth coupled with implementation of successful cost initiatives.
Consolidated revenue totaled EGP 12.7bn, increasing 25% Year-on-Year on the back of higher data services and increased cable projects revenue mainly owed to the recognition of the USD 20mn PEACE cable crossing.
Customer base demonstrated improved trends across all segments with fixed voice customers growing 11% Year-on-Year, fixed broadband increasing by 19% Year-on-Year and mobile reporting a 29% growth.
The company recorded a total cost of EGP 1bn for the Early Retirement Program (ERP) with c2000 employees signing up, which will be paid to the employees in Q3. Such cost led to the decline of EBITDA to reach EGP2.6bn and net profit stabilized at EGP 2.1bn.
Excluding the ERP, EBITDA would reach EGP 3.6bn, growing 11% Year-on-Year recording a margin of 29% and net profit would land at EGP 2.9bn.
Normalized net profit increased 41% Year-on-Year as a result of forex gains, EBITDA growth and the rebound in Vodafone’s investment income.
In-service CapEx intensity reached 29% as a result of the company’s plan to accelerate infrastructure and network development to complete the copper-to-fiber replacement program in 2 years rather than 4, ending by 2020.
Net debt amounted to 10.2bn, representing 1.6x of annualized EBITDA compared to 2.1x in FY 2018.
Adel Hamed, Group Chief Executive, commented, “This quarter, our operational and financial performance demonstrated our ability to successfully execute our strategy and maximize our return on investment by enhancing the quality of our services, which was clearly reflected in the notable growth of our data revenue. The recognition of PEACE cable revenue that was introduced last April also contributed to the 24% YoY top line growth.
“We are very pleased with the launch of WE SPACE internet offerings that represent a shift in the Egyptian broadband market through the introduction of high speed bundles with speeds that start from up to 30 Mbps instead of 5Mbps, allowing us to better monetize our network investments. Additionally, the company has completed the groundwork for the preparation for the nationwide launch of IPTV services and the WE Wallet to fulfil our strategy of leading the market as a total ICT provider.”
He added, “In parallel with our strong revenue growth, we successfully implemented cost cutting initiatives including the restructuring of our debt, which lowered this quarter’s interest costs, and the activation of the early retirement program that will further reduce our expenses on the short-run.”