Telecom Egypt has announced its Q3 2024 financial results, highlighting strong revenue growth and operational resilience despite challenging market conditions.
9M 2024 Key Highlights
Total revenue rose by 39% year-over-year (YoY), reaching EGP 58.4 billion, driven primarily by a 46% YoY increase in data revenues, which accounted for 45% of total revenue growth. This was supported by a growing customer base and price adjustments implemented earlier in the year. International Direct Dialing (IDD) revenues surged by 61% YoY, while Capacity Sales experienced a remarkable 90% YoY growth. The customer base expanded across all segments, with Mobile growing by 9%, Fixed Broadband by 8%, and Fixed Voice by 4%. EBITDA increased by 34% YoY to EGP 23.5 billion, achieving a 40% margin in line with targets.
However, net profit declined by 6% YoY to EGP 8.6 billion, reflecting a net profit margin of 15%. In-service CapEx stood at EGP 12.8 billion (22% of sales), while Cash CapEx amounted to EGP 30.1 billion (52% of sales). The net debt-to-EBITDA ratio increased to 2.3x in 9M 2024, up from 1.7x in FY 2023, mainly due to currency depreciation. Free Cash Flow to Firm (FCFF) improved during the period, recording EGP -5.9 billion, or EGP 48 million excluding license fees, compared to H1 2024.
Previous Result: Telecom Egypt’s Total Revenue Surges to EGP 38.0 Billion in Q2 2024
Mohamed Nasr, Managing Director and Chief Executive Officer, commented, “Telecom Egypt has once again demonstrated its ability to navigate through a complex and challenging environment. Despite the challenging macroeconomic environment, we have successfully maintained healthy results, underscoring the strength and resilience of our business model.
Our total revenue increased by 39% YoY, reaching EGP 58.4 billion. EBITDA grew by 34% YoY, reaching EGP 23.5 billion and recording a 40% margin, thanks to strong top-line growth and effective cost-optimization measures, which allowed us to maintain margins at targeted levels despite continued inflationary pressures. However, net profit declined by 6% YoY, landing at EGP 8.6 billion, despite the strong operational growth and a 56% increase in our income from VFE, as the 3x YoY higher net finance costs caused by the devaluation of the EGP and the higher interest rates during the period pressured the bottom line.
The Retail segment continues to grow organically, driven by an expanding customer base and the implementation of price adjustments at the start of the year. Data revenue remains the primary growth engine for this segment, reflecting broader global trends. Meanwhile, the Wholesale segment is also performing well. Just this week, we signed long-term, landmark infrastructure service agreements with Vodafone Egypt, with varying maturities up to 2034, with a total value of EGP 30 billion. These agreements align with our strategic plan to monetize our existing assets and network infrastructure.
Overall, our business remains resilient, and we are optimistic about the future, as macroeconomic conditions begin to stabilize. We are witnessing a stabilization in the exchange rate, a gradual decline in inflation, and a reduction in Federal Reserve interest rates - with local interest rates likely to follow suit. This stabilization will help enhance our financial performance moving forward. While our cost structure has risen to a new base, it has now largely stabilized, giving us clearer visibility to scale up revenue and enhance margins. On the CapEx front, our investments in subsea cables, fiber optic networks, mobile networks, and the 5G license were essential for our growth and to secure our position in the market. However, we are actively optimizing next year’s expenditures and achieve healthier cash flow without hindering our revenue growth momentum.
As we approach the end of 2024, we remain focused on delivering innovative solutions and exceptional value to our customers and partners. By continuously enhancing our services portfolio, optimizing expenditures, and strategically monetizing our assets and infrastructure, we are committed to maximizing shareholder returns and driving sustainable growth across our core business lines. Confident in our ability to meet targets, we reaffirm our 2024 guidance and remain dedicated to creating long-term value for our shareholders.”
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