Telecom Egypt announced its Q3 2020 results ending 30 September 2020. According to their report, the telco showed an exceptional operational growth coupled with strong operating cash flow. Its 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. Its 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.
Commenting on the results, Adel Hamed, Group Chief Executive said, “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.”
The company’s 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.
“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,” he continues.
Telecom Egypt recently was granted additional spectrum. The company is expected to receive 20MHz of spectrum in the 2600MHz band, utilizing TDD technology with a right of use of 10 years for USD 305mn. The acquisition of the additional spectrum helps the company to transform from a fully integrated telecom provider to the leading ICT provider in Egypt.
“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” Hamed added.
