Telecom Egypt today announces its Q3 2020 results ending 30 September 2020.
9M 2020 key highlights
• Consolidated revenue increased 18% YoY, landing at EGP 22.3bn. The growth is mainly driven by a 31% YoY hike in retail revenue boosted by strong data growth.
• Customer base remains on an uptrend across the board with fixed voice and broadband growing 9% and 16% YoY, respectively, and mobile customers growing 55% YoY, reaching 7.1mn.
• EBITDA reached EGP 7.5bn, recording a strong 34% margin. Adjusting for the ERP cost (EGP 1.3bn) incurred in 2019, EBITDA would grow by 45% YoY.
• Operating profit grew 46% YoY, after excluding the effect of the ERP cost, on a high margin revenue mix that overshadowed the 35% YoY increase in D&A costs.
• Net profit came in at EGP 3.5bn in 9M 2020, slightly increasing by 3% YoY due to the abundance of one-offs in 2019. Normalizing for the ERP cost, FX, VIS Sale, and impairments during 9M 2020, net profit would have increased by 21% YoY. Q3 net profit reached EGP 1.5bn, growing 14% YoY.
• In-service CapEx reached EGP 6bn, representing 27% of revenue.
• Net debt amounted to 16.9bn, representing 1.7x of annualized EBITDA compared to 2.1x in FY 2019 (adjusted for the ERP cost), while the effective interest rate continued to decline to 6.3%.
• Net operating cash flow reached a record high EGP 5.7bn in tandem with the continued revenue growth.
Adel Hamed, Group Chief Executive, commented:
'I am very proud of this quarter's results as they substantiate our outstanding operational performance and demonstrate Telecom Egypt's huge growth potential, especially in Egypt's highly lucrative data market. Our top line increased 17% YoY, fuelled by the growth of the retail segment thanks to the hike in data revenues, which continued to impress on a QoQ and YoY basis. With a strong EBITDA margin of 33% and a 2x higher operating profit this quarter, the company continues to benefit from the retail segment's growing contribution to the top line, now standing at 64%, and its enhanced revenue mix that tilts towards improved profitability. The aforementioned has led to a considerable growth in the company's net operating cash flow that has reached EGP 5.7bn year-to-date and has consequently supported the expedited CapEx rollout program. Recently, the NTRA accepted our request for additional spectrum, a step that will support us in our endeavour to upgrade and maintain our nationwide mobile network to best serve our customers and improve our profitability further. We have also recently announced that we are building the country's largest internationally certified data center facility and in result, all our customers will receive the highest levels of availability and technical resiliency in the market.'