Telecom Egypt reports strong second quarter as net profit surges 175%

12 Aug 2016

Publishing its financial results for the three months ended 30 June 2016, Telecom Egypt (TE) said it had continued to ‘show excellent progress against [its] strategic plan’, with revenue, EBITDA and net profit all rising on an annualised basis.

Consolidated revenues generated in the second quarter of the year totalled EGP3.294 billion (USD370 million), an increase of 8.9% against the EGP3.025 million for the year earlier period. Turnover from the company’s ‘Home Services Business’ unit increased by 15.2% to EGP1.009 billion, with a 39% year-on-year increase in revenue from data services (to EGP670 million) helping offset a 14% drop in fixed voice revenue (to EGP339 million). ‘Enterprise Solution Business’ meanwhile recorded revenues of EGP570 million in 2Q16, representing a 11.5% increase against the corresponding period a year earlier. Rounding out the company’s revenue generating units, ‘Domestic Wholesale Business’, ‘International Carriers Affairs Business’ and ‘International Customers and Networks’ saw revenues of EGP813 million (up 16.4%), EGP742 million (down 4.1%) and EGP160 million (down 3.3%), respectively.

EBITDA for the second quarter of 2016 stood at EGP1.066 billion, an increase of 21% y-o-y, largely driven by ‘strong performance in [TE’s] higher margin retail business’. EBIT in the period under review reached EGP1.129 million, more than double the EGP523 million reported for Q2 2015. Total income from investments, mainly representing TE’s stake in Vodafone Egypt, rose by 104.6% y-o-y (though was actually down 7.5% quarter-on-quarter) to EGP716 million for the first half of 2016. Having primarily been driven by higher total turnover and improved income from investments, TE’s consolidated net profit after tax for Q2 2016 was EGP1.039 billion, a 175% increase against the EGP378 million recorded a year earlier.

Commenting on the results, TE CEO Tamer Gadalla was cited as saying: ‘The financial and strategic impact of our fibre upgrade is clear. It is already contributing to our ability to grow revenues and improve margin … The business I report on is in good financial shape and our strategic investments are also making positive contributions to our financial performance. The net profit result is extremely encouraging for our investors.’

Egypt, Telecom Egypt