Nasr: We are committed to providing innovative solutions and exceptional value to our customers and partners and maximizing shareholders' wealth
By: Bakinam Khaled
Egyptian Telecom has revealed its business results for the nine months ending September 30, 2024, according to the consolidated financial statements prepared in accordance with Egyptian accounting standards.
The most important indicators of the results for the nine months ending September 30, 2024 included the company achieving a growth in total consolidated revenues of 39% compared to the same period last year, reaching EGP 58.4 billion, driven by an increase in data services revenues in the retail business unit by 46% compared to the same period last year, which constituted 45% of the total growth in revenues, thanks to the growth in the customer base and the adjustment of the prices of services provided at the beginning of the year, followed by a jump in incoming international call revenues and international capacity sales by 61% and 90% respectively compared to the same period last year. The company also showed growth in its customer base across all services provided, as the number of mobile phone subscribers, fixed internet and fixed voice increased by 9%, 8% and 4% respectively, and earnings before interest, taxes, depreciation and amortization grew by 34% compared to the same period last year, reaching EGP 23.5 billion with a profit margin of 40%. In line with the targeted levels. Net profit after tax decreased by 6% compared to the same period last year to reach EGP 8.6 billion with a profit margin of 15%. Capital expenditures for in-service assets amounted to EGP 12.8 billion (22% of total revenues) while cash capital expenditures amounted to EGP 30.1 billion (52% of total revenues).
Net debt to EBITDA ratio reached 2.3 times in the nine-month period compared to 1.7 times at the end of 2023, mainly due to the change in foreign exchange rates. Free cash flows improved during the nine-month period compared to the first half of the same year to record negative EGP 5.9 billion, and in the event of neutralizing the value of license expenses, it reaches EGP 48 million.
For his part, Eng. Mohamed Nasr, Managing Director and CEO of Telecom Egypt, said on the nine-month results that Telecom Egypt has once again proven its ability to continue its strong performance under exceptional and challenging circumstances. Despite the current economic challenges, we have continued to achieve outstanding financial results that confirm the strength and resilience of our business model.
Total revenues increased by 39% compared to the same period last year, reaching EGP 58.4 billion. EBITDA grew by 34% compared to the same period last year, reaching EGP 23.5 billion, recording a profit margin of 40%, thanks to strong revenue growth and effective cost rationalization efforts that enabled us to maintain profit margins at targeted levels despite inflationary pressures. Despite these efforts, net profit decreased by 6% compared to the same period last year, recording EGP 8.6 billion, despite the outstanding operational growth and the 56% increase in investment income in Vodafone Egypt, as the increase in financing costs, which amounted to 3 times the value compared to the same period last year due to the change in exchange rates and the rise in interest rates during that period, had a significant impact on net profit.
Retail business units continued to grow by offering diversified services, driven by customer base growth and the price adjustments implemented at the beginning of the year. Data revenues remain the main driver of growth for retail business units, reflecting global indicators indicating an increase in demand for data services.
At the same time, wholesale business units are performing well. During this week, we signed several long-term agreements to provide infrastructure services to Vodafone Egypt, with maturities varying until 2034 and a total value estimated at EGP 30 billion. These agreements are in line with our strategic plan to make the best use of our advanced network and infrastructure.
Overall, our business has maintained its ability to achieve strong growth and has been able to adapt flexibly to current changes and challenges. We are optimistic about the future, as we see a noticeable stability in economic conditions. We are currently witnessing stable exchange rates, a gradual decline in inflation, and a decline in federal interest rates - with local interest rates expected to follow the same trend in the near future. This stability will help us improve our financial performance in the coming period. Despite the overall increase in our costs and their rise to a new level, they have largely stabilized, giving us a clearer vision for revenue growth and improved margins.
On the capital expenditure front, our investments in submarine cables, fiber optic networks, mobile networks and the 5G license remain essential to continue achieving growth and strengthening our market position. However, we are working tirelessly to rationalize expenses over the coming year to achieve better cash flow without impacting business growth and revenue growth.
As we approach the end of 2024, we remain committed to delivering innovative solutions and exceptional value to our customers and partners. Preserving and even increasing shareholder wealth, and achieve sustainable growth in all our main business units by continuously improving our services, rationalizing expenses, and achieving the best utilization of our assets and infrastructure. With full confidence in our ability to achieve our goals, we remain committed to achieving our expectations for performance indicators for 2024 and to creating sustainable value for our shareholders.
