In its Q3 2024 report published last week, Telecom Egypt records a growing customer base, and the price adjustments made at the beginning of the year contributed to a 46 per cent YoY increase in data revenues, which accounted for 45 percent of the total revenue growth.
International Direct Dialling (IDD) revenues increased by 61 per cent YoY, and capacity sales surged by 90 per cent YoY, contributing to a 39 per cent YoY increase in total revenue to EGP 58.4 billion, up from EGP 41.95 billion in the same period last year.
The customer base grew by nine percent, eight percent, and four per cent year over year for mobile, fixed broadband, and fixed voice, respectively.
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Strong top-line growth and successful cost-optimisation strategies helped it sustain margins at targeted levels despite soaring inflation, resulting in EBITDA growing 34 per cent YoY to EGP 23.5 billion and earning a 40 percent margin which was within its desired range.
Despite robust operational growth and a 56 percent increase in its income from VFE, net profit fell by 6 percent to EGP 8.6 billion as opposed to EGP 9.1 billion in the previous year. The bottom line was pressured by net financing costs which were three times higher than the previous year, brought on by the depreciation of the currency and higher interest rates during the period.
A growing client base and price changes made at the beginning of the year are the main drivers of the retail segment’s ongoing organic growth. Reflecting broader worldwide trends, data revenue continues to be the segment’s key growth engine.
Telecom Egypt CEO comments on the Q3 2024 report
Commenting on the report, Mohamed Nasr, Managing Director and Chief Executive Officer said, “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.”
In the meantime, the wholesale division is doing well as well. The telecom just inked a historic, long-term infrastructure service contract with Vodafone Egypt, totalling EGP 30 billion, with different maturities up to 2034. These contracts support its strategic goal of generating revenue from its current network infrastructure and assets.
“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, optimising expenditures, and strategically monetising our assets and infrastructure, we are committed to maximising shareholder returns and driving sustainable growth across our core business lines,” the telecom CEO noted.
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Telecom Egypt optimistic about the future
The company is optimistic about the future as the macroeconomic environment starts to stabilise.
He added, “We are witnessing a stabilisation in the exchange rate, a gradual decline in inflation, and a reduction in Federal Reserve interest rates – with local interest rates expected to follow suit in the near future. This stabilisation will help enhance our financial performance moving forward.
“While our cost structure has risen to a new base, it has now largely stabilised, giving us clearer visibility to scale up revenue and enhance margins.”
Regarding its capital expenditures, the telecom’s investments in mobile networks, fibre optic networks, subsea cables, and the 5G licence were crucial to its expansion and market position.
Nonetheless, the Telecom Egypt CEO noted that they are putting in a lot of effort to maximise spending for the upcoming year and get a higher cash flow without impeding the velocity of their revenue growth.
“With confidence in our ability to achieve our targets, we reaffirm our 2024 guidance and remain dedicated to creating long-term value for our shareholders,” he concluded.