Telecom Egypt’s retirement programme dents EBITDA in H1 2019

9 Aug 2019

Telecom Egypt has reported its financial results for the first six months of 2019, revealing that despite a notable increase in revenue driven by broadband uptake, EBITDA had tumbled due to costs associated with its Early Retirement Programme (ERP). In the six months ended 30 June 2019 the operator generated a total turnover of EGP12.696 billion (USD765 million), up 25% year-on-year from EGP10.125 billion in H1 2018. Of the total, EGP4.940 billion was contributed by the operator’s ‘Home & Consumer’ division, representing annualised growth of 31%, while revenues from the ‘Enterprise’ unit saw similar gains, increasing 32% y-o-y to EGP1.601 billion. Turnover from the telco’s ‘International Customers & Networks’ division saw the largest gains in percentage terms, with revenues rising 73% y-o-y to EGP1.635 billion, while ‘Domestic Wholesale’ and ‘International Carriers’ standing at EGP2.250 billion (H1 2018: EGP1.965 billion) and EGP2.270 billion (EGP2.236 billion), respectively.

Meanwhile, EBITDA was down 20% on an annualised basis at EGP2.637 billion, with Telecom Egypt noting that this had been impacted by a total cost of EGP1 billion for its ERP, to which around 2,000 employees had signed up. Net profit for the period under review was EGP2.131 billion, up from EGP2.058 billion in H1 2018.

In operational terms, at the end of June 2019 Telecom Egypt was serving 5.536 million fixed broadband subscribers, up from 4.643 million a year earlier, though notably the figure was broadly flat against the previous quarter. Fixed broadband uptake continued to help drive an increase in fixed voice accesses, which rose to 8.213 million at end-June 2019, from 7.402 million a year earlier. Telecom Egypt also continued to make gains in the wireless sector, reporting 4.260 million mobile subscribers by the end of the reporting period, up from 3.305 million at mid-2018, though the latest figure represented only a marginal increase in the quarter (Mar-19: 4.247 million).

Egypt, Telecom Egypt