Investment strategy pays off for Telecom Egypt
Telecom Egypt has announced its quarter two 2018 financial results ending 30 June 2018 with a strong operational performance indicating the success of its long-term investment strategy.
Consolidated revenue crossed EGP 10bn for the first time increasing 16 per cent as data services continued to lead growth boosted by fixed broadband.
Mobile revenue contributed a high single digit to retail revenue demonstrating management effort to monetize the successful customer acquisition witnessed since launch.
Customer base expansion across the board with fixed voice customers recorded an 11 per cent growth, a reversal of trend which continues to be supported by the continuation of fixed broadband customer growth of 27 per cent. Additionally, mobile net additions reached one million year-to-date.
Operating profit grew 11 per cent year on year despite the high level of Capex reflected on the increased depreciation and cost of the license represented in the hike in amortization
Net Profit declined 18 per cent to EGP 2.1bn on a decline in investment income from Vodafone Egypt and the impact of higher financing expenses.
First half of 2018 net profit was weighed on by quarter one performance as quarter two net profit increased 4 per cent year on year and 66 per cent QoQ thanks to operational growth offsetting the increase in D&A and finance expenses.
CAPEX amounted to EGP 1.7bn representing 17 per cent of sales.
Ahmed El Beheiry, Group Chief Executive, commented: “We are extremely proud of this quarter’s operational performance. Telecom Egypt has been able to maintain its net profit YoY with a slight increase in Q2 2018 thanks to the management team’s effort to strictly follow the long-term strategy put before the BoD at the beginning of the year and to overcome through operational efficiency the challenges of higher costs of marketing new products, the impact of Capex spending on depreciation and the higher borrowing costs. I am extremely pleased with the operating profit growth we achieved this quarter of 26% YoY, which has helped us to offset all the base effect on the bottom line of being in a new investment phase. It is important to highlight that our strategy relies on targeted investments in order to fulfil our goals for the company and the country.”