Telecom Egypt profits surge on corporate tax changes in Q3

17 Nov 2015

Amendments to corporate tax laws helped Telecom Egypt record a significant year-on-year increase in net profit in the third quarter of 2015. In its financial results for the three months ended 30 September 2015 the operator revealed an almost 360% increase in net profit to EGP1.203 billion (USD153 million) from EGP262 million in the corresponding period a year earlier. Explaining the benefits of the tax law change, the company noted: ‘Most notably, we experienced a significant increase in net profit, which was primarily attributable to amendments to the Corporate Tax Law relating to the taxation of dividends as well as lowering the corporate tax rate retroactively as of 1 January 2015 from 30% to 22.5%. As a result, the company had to reverse a deferred tax liability amounting to EGP613 million, and recognised a lower corporate tax for the period by EGP371 million for the nine month period of 2015.’

Consolidated revenues for the third quarter of 2015 were up 8.0% year-on-year, meanwhile, at EGP2.717 billion, with the operator registering notable increases in turnover from its ‘Home Services’ and ‘Wholesale’ offerings, which rose by 13.8% and 17.4% y-o-y, respectively. EBITDA in the period under review totalled EGP794 million, a figure which represented growth of 22.5% when compared to Q3 2014, while the EBITDA margin was 27.1%.

In operational terms, at the end of September 2015 Telecom Egypt had a total of 2.465 million residential fixed broadband subscribers, up almost 36% against the 1.814 million it reported a year earlier, while ‘Enterprise’ ADSL-based broadband accesses numbered 154,000, up from 116,000 in 3Q14. Fixed voice subscribes continued to decline, however, with the company reporting 5.560 million such customers in the residential arena, down from 5.490 million at end-September 2014, with Enterprise fixed voice lines falling marginally, from 1.080 million to 1.070 million.

Egypt, Telecom Egypt