Q1 2018 results: a strong start for the new total telecom operator

Telecom Egypt (Ticker: ETEL.CA; TEEG.LN) today announced its results for Q1 2018 ending 31 March 2018. Quarterly key highlights

• Consolidated revenue came in at EGP 4.8bn increasing by EGP 638mn YoY, a 15.4% increase.
• EBITDA totalled EGP 1.5bn with a growth of 8.5% YoY, delivering an EBITDA margin of 31.5%. • Net Profit After Tax recorded EGP 688mn with a YoY drop of 48%.
• Earnings per Share (EPS) for Q1 2018 reached EGP 0.40 compared to 0.78 in Q1 2017.
• In-service CapEx including mobile license came in at EGP 603mn representing 12.6% of revenue as compared to 12.1% in Q1 2017.
• Net Debt totalled EGP 6.5bn in Q1 2018 from EGP 6.7bn in Q4 2017, representing a net debt to EBITDA of 1.1x (based on an annualized EBITDA) compares to 1.3x in FY 2017.
• Total fixed broadband market share continued to grow reaching 79% supported by a 29% increase in customer base to reach 4.4mn subscribers by end of Q1 2018.
• Fixed voice sustained the new trend of customer base growth totalling 7.3mn (+ 10% YoY).
• Mobile customers totalled 2.9mn with above market average mobile data penetration.

Ahmed El Beheiry, Group Chief Executive, commented: 'I am very pleased with the achievements we made this quarter, which put us on track to deliver on our business objectives and meet our guidance for the full year. This quarter's KPIs demonstrate the company's ability to sustain operational growth reflected in a double-digit growth in revenue, and a high single digit growth in EBITDA.

Retail has led our revenue growth and we owe a large share of it to data services in both ADSL and mobile broadband. On the wholesale side, we have maintained a stable performance YoY despite of the global declining trend of international traffic. The IC&N business unit secured a growth of 18% in revenue of which 79% is attributable to International Customer Support services.

During this quarter, Telecom Egypt has introduced three major moves to solidify its position as a total telecom operator starting with the full-fledged prepaid recharge platform in January, followed by our post-paid tariff 'Indigo' with the first integrated bundle, and finally revamping fixed broadband taking the internet speed to an unprecedented level in Egypt reaching 100Mbps. The latest move introduces 'WE Internet' to complement our 'WE Mobile' offering, building up our full 'WE Retail' brand in Egypt.

We have worked tirelessly across the organization in Q1 2018 to deliver a superior customer experience across all touch points starting from the commercial product development to IT and infrastructure solutions, ending with an enhanced customer care experience.

Management's mandate goes beyond retail services; we continue to focus on our existing wholesale segments to secure a continuous revenue stream and position the company as one of the largest total telecom operators in the Middle East. Hence, the BoD approved the acquisition of Middle East and North Africa Submarine Cable (MENA Cable) in order to reinforce Telecom Egypt's footprint in the submarine cable business. I am looking forward to a promising future for Telecom Egypt, and I am full of confidence in the transformation the company has started.'