TE reports lower EBITDA on increased salary costs and backdated interconnection costs

11 Mar 2013

Telecom Egypt (TE) has published its financial results for the year ending 31 December 2012, with the fixed line incumbent revealing a year-on-year drop in EBITDA and net profit in the period, despite a marginal increase in turnover.

In the year under review TE posted net income of EGP2.611 billion (USD427 million), down 12.8% compared to the EGP2.993 billion it recorded in its 2011 financial year, while EBITDA for the period stood at EGP3.725 billion, representing a 19.2% decline against FY11. TE cited a number of factors for the drop in EBITDA, including increased costs related to salaries and the backdating of interconnection costs related to an agreement with local cellco MobiNil.

Total consolidated revenues for FY12 were up 1.6% year-on-year at EGP10.032 billion, although turnover from TE’s retail services actually declined, falling 2.0% to EGP4.560 billion. Indeed, the telco reported a 15.1% annual drop in fixed voice revenues to EGP1.460 billion, as the number of fixed line calls continued to fall. TE’s ‘continued focus on higher value dual-play customers’, however, helped the decline in voice turnover to be offset by increased turnover from its internet subsidiary TE Data, which saw its customer numbers climb by 22.6% y-o-y, leading to a 24.5% increase in revenue from the unit. Wholesale revenues meanwhile accounted for 53.6% of total consolidated turnover in FY12, with TE noting: ‘Throughout 2012 we have seen a continued strengthening of the Egyptian mobile market and TE has remained well placed to benefit from this with our wholesale division providing the backbone to the leading networks in Egypt.’ In the full year period TE recorded a 5% increase in wholesale revenues to EGP5.382 million, while it highlighted what it called the securing of longer term revenues following the inking of an agreement with MobiNil for the provision of international communications and infrastructure services.

In operational terms, TE reported 250,845 net ADSL subscriber additions in the twelve-month period, a figure it noted was 10% higher than additions in 2011. At end-December 2012 TE Data’s broadband subscriber base stood at 1.362 million.

Egypt, TE Data, Telecom Egypt