Telecom Egypt (TE) has reported a 10% increase in consolidated revenue for the quarter ended 30 September 2019, with total turnover reaching EGP6.316 billion (USD391 million), with the largest contribution arising from its ‘International Customers & Networks’ and ‘Home & Consumer’ operations, which generated EGP2.099 billion and EGP2.085 billion, respectively. EBITDA for the quarter totalled EGP1.063 billion, which represented a 48% year-on-year decline from the EGP2.036 billion recorded in 3Q18, with a margin of 17%. TE attributed the drop in EBITDA to the impact of its deal struck with Bharti Airtel in 3Q18 for global submarine systems, and its early retirement programme (ERP), saying that excluding the Bharti deal from Q3 2018 and the ERP from Q3 2019 ‘leads to a normalised flat EBITDA and a margin of 24%’. Net profit after tax totalled EGP1.089 billion, down from EGP1.448 billion, with TE again stating that the figure would have been flat y-o-y when excluding the Bharti deal, noting also that foreign exchange gains and higher investment income from Vodafone had offset the ERP and higher depreciation expenses related to an accelerated CAPEX programme.
In operational terms, TE’s mobile base continued to increase, rising to 4.575 million at the end of the reporting period, up from 3.589 million at end-September 2018. Fixed broadband accesses also maintained an upward trend, reaching 5.700 million at 30 September 2019, up from 4.968 million a year earlier, with fixed voice lines standing at 8.387 million (Sep-18: 7.589 million).
Commenting on the company’s performance, Adel Hamed, TE’s group chief executive, said: ‘The results we announce today are a signal that we are moving in the right direction with revenue continuing to grow at a double digit and filtering through to EBITDA, especially in light of the absence of any one-off or project based revenue in the quarter. That said, such investment led to a jump in depreciation and financing expenses that has pressured the bottom-line in spite of strong operational performance, yet we have created a large opportunity and exceptional positioning for us to monetise such investment for years to come.’