3Q net profit for TE down 13%; 9M still ahead with 17.7% y-o-y rise

12 Nov 2009

Egyptian fixed line incumbent Telecom Egypt (TE) has revealed a 13% year-on-year decline in net profit for the three months ended 30 September 2009 to EGP826 million (USD151 million), considerably ahead of analyst expectations. Revenue for the company in the three-month period also declined, down 5.5% y-o-y to EGP2.54 billion, while earnings before interest, tax, depreciation and amortisation (EBITDA) after provisions fell 11.2% compared to the same period a year earlier to EGP1.25 billion. Despite the quarterly drops, the company’s fiscal results for the nine-month period ending 30 September 2009 were more impressive, with TE posting a 17.7% increase in net profit against 9M 2008 to EGP2.58 billion, while nine-month revenue for end-September 2009 was EGP7.74 billion, up 3.3% against the corresponding period in 2008.

Fixed line subscribers continue to decline for the telco however, with TE reporting that at end-September 2009 it had 9.63 million subscribers, down some 15%, or two million, against the same date a year earlier. Uptake of the company’s ADSL services has continued to climb though, with TE reporting a 68.4% increase in its broadband subscriber base to 571,819 at the end of the reporting period.

Commenting on the results, Tarek Tantawy, chief executive officer of TE, said: ‘I am pleased to report a nine-month performance which is testament to TE’s resilience and determination. Reporting revenue growth of 3% over the last nine months is a solid achievement, particularly when our top and bottom line performance has delivered against intensification in the land grab for mobile subscribers, something which is now attracting regulatory oversight. While such aggressive marketing promotions are being felt at the revenue level, we have protected our margins which remain some of the strongest in the industry.’

Egypt, Telecom Egypt