Telecom Egypt (TE) announced, on Tuesday, its business results for the first half (H1) of 2021, which ended on 30 June. The company’s consolidated revenues landed at EGP 17.4bn, reflecting a growth of 16% compared to the same period of the previous year. This was driven by the outstanding growth in data services, which increased by 31%.
The company showed a growth in its customer base for all services provided, with the number of landline subscribers increasing by 6%. At the same time, the number of ADSL customers increased by 18%, and mobile subscribers by 21%, compared to H1 of 2020.Net profit after taxes reached EGP 3.9bn, an increase of 88% over the same period of the previous year, supported by an increase of return on investment in Vodafone.
By neutralising the impact of non-operating elements represented in provision reversals, currency differential profits, deferred income taxes, the net profit reached EGP 3.5bn. This reflected a growth rate of 54% compared to the same period of the previous year.
TE’s net debt amounted to EGP 19bn, achieving a net debt ratio of 1.4 times profit before interest, taxes, depreciation and amortisation, on an annual basis compared to 1.6 times at the end of 2020. Meanwhile, the company’s interest on debt decreased to 5.7%, compared to 6.9% in H1 of 2020.
Adel Hamed, Managing Director and Chief Executive Officer, commented: “I am very proud of our performance during the first half of the year, as we continue to deliver on our growth targets; both operationally and financially.
Our focus on cash flow is also evident in this quarter’s results and in the recent announcement of a modified shareholders’ agreement with Vodafone Group. In the first half of the year, we have doubled our net operating cash flow and reached a positive free cash flow both including and excluding Vodafone Egypt’s dividends of EGP 1bn and EGP 0.2bn, respectively, the latter being a first in five years, which is a substantial milestone especially considering the EGP 2.4bn spectrum payment in Q1.
We have provided guidance to the market before that our aim is to translate the impressive top line growth to our bottom line and subsequently to cash flows. That, combined with Capex rationalization and sustainable dividends from Vodafone Egypt, would yield sustainable positive cash flows in the future. We were aiming for this outcome while negotiating the amended shareholders’ agreement with Vodafone Group and we will continue to work on several other work streams to ensure Telecom Egypt’s leadership in the market across all fronts. We are also happy to inform you that we have received the second tranche of Vodafone Egypt’s exceptional distribution of EGP 3.6bn in July.”