Telecom Egypt today announces its Q2 2020 results ending 30 June 2020.

 H1 2020 key highlights

• Consolidated revenue climbed 18% YoY, landing at EGP 15bn, on a 37% YoY increase in data revenue, followed by growth in voice and infrastructure revenues.
• Customer base continued to grow YoY with a 20% YoY increase in fixed voice, 14% YoY in fixed broadband, and a 58% YoY increase in mobile customers, the latter reaching 6.7mn subscribers.
• EBITDA came in at EGP 5bn, recording a 34% margin. Normalizing for the EGP 1bn ERP costs incurred in Q2 2019, EBITDA grew 38% YoY on a higher margin revenue mix.
• Operating profit grew 27% YoY (adjusted for the ERP) on the back of a high margin revenue mix that offset the 48% YoY increase in D&A costs.
• Net profit reached EGP 2.1bn, declining slightly by 3% as a result of the FX loss in Q2 of EGP 549mn and a 26% higher net interest expense, which was offset by the solid operational performance. Normalizing for the ERP, the FX loss, and one-off impairments, net profit would have grown by 4%.
• In-service CapEx intensity came in at 17% amounting to EGP 2.6bn, while cash CapEx stood at EGP 5.5bn, representing 36% of top line.
• Net debt amounted to 16.2bn, representing 1.6x of annualized EBITDA compared to 2.1x in FY 2019 (adjusted for the ERP).

Adel Hamed, Managing Director and Chief Executive Officer, commented:

"I am very proud of Telecom Egypt's performance this quarter as the strong set of operational and financial results demonstrate the company’s remarkable ability to grasp the potential in the data market and monetize its massive network investments. Our top line grew 18% YoY and filtered through to a healthy EBITDA margin of 34% thanks to the upsurge in data, infrastructure, and digital transformation revenues. This exhibits that all our business units are strongly benefiting and capitalizing on investments made in prior years, which have enabled our robust infrastructure to withstand unprecedented traffic growth from our different customer segments.

Such successful P&L indicators have also reflected significantly on our cash flows in the first half of the year, with the company recording its highest operating cash flow in any reporting period to date while continuing to make large payments to its suppliers and fulfilling CapEx commitments. Operating cash flow reached EGP 4.7bn, more than 2x as much as any prior corresponding period, and Telecom Egypt made EGP 5.5bn in cash CapEx payments, leading it to almost break-even on FCF for the period.

We are closely monitoring our liquidity and financing costs to ensure that our shareholders recognize the returns that are expected from the very strong operational growth. On that front, net debt to EBITDA declined to 1.6x, flat YoY, and down from 2.1x in FY 19. This comes as a result of the significant operational growth that offset the 52% increase in gross debt."