Telecom Egypt announces its Q1 2021 results: Continued top line growth filters through to strong net profit

By Hamed Mahmoud

Q1 2021 key highlights

• Consolidated revenue came in at EGP 8.4bn, growing 20% YoY on higher data revenue (+37% YoY) constituting 66% of top line growth.
• Customer base grew across the board with fixed voice customers increasing 7% YoY, fixed data 22% YoY, and mobile customers 38% YoY.
•  EBITDA landed at EGP 3.2bn, growing 42% YoY and recording a strong margin of 39% thanks to an enhanced revenue mix and continued cost optimization.
• Net profit reached EGP 2.1bn, growing 62% YoY, thanks to strong operational results. Excluding non-operational items such as provisions, impairments, FX gains, deferred tax, and inorganic growth in investment, net profit would reach 1.8bn, growing 77% YoY.
• Operating cash flow grew 80% YoY and 33% QoQ, reaching EGP 3.4bn.
• In-service CapEx/sales recorded 14%, while cash CapEx reached EGP 5.7bn mainly as a result of paying the first tranche of the new spectrum acquisition.
• Net debt reached EGP 19.8bn, representing 1.5x of annualized EBITDA, declining from 1.6x in FY 2020, while the effective interest rate declined to 5.7% vs. 7.4% in Q4 2020.

Adel Hamed, Managing Director and Chief Executive Officer, commented: “I am very pleased with this quarter’s results as they reflect Telecom Egypt’s ability to preserve its growth momentum witnessed during 2020 and report strong financial and operational results. We have witnessed double-digit growth across the P&L; with revenue growing 20%, EBITDA 42% with a margin of 39%, and normalized net profit 77% YoY. The main growth driver continues to be data, both fixed and mobile, and we have witnessed growth in customer numbers and spending, which we continue to push by not only investing in our network, but also enhancing customer experience to solidify our leading position in the market.

Our aim is to continue to translate the impressive growth in our top-line, now that it is evident in our bottom line, to our cash flows. We monitor our operating and free cash flow closely and continue to look into cost optimization and CapEx rationalization strategies that also support the growth of the business.”