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Press Releases

Q2 2022 results: Robust margins mirroring strong fundamentals

11 August 2022
H1 2022 key highlights

• Consolidated revenue landed at EGP 20.4bn, up 17% YoY, mainly attributed to an 18% spike in retail revenue and 16% increase in wholesale revenue due to higher data, infrastructure, and capacity sales.

• Customer base grew YoY on all fronts, with fixed voice and data subscribers increasing by 10% and 13%, respectively. Mobile customers increased by 44%, which included 3.6mn additional subscribers comprising 2.1mn related to the schools project and social solidarity initiatives.

• EBITDA amounted to EGP 8.1bn, recording a strong 40% margin due to an improved revenue mix.

• Net profit came in at EGP 3.8bn; excluding non-operational items, it reached EGP 4.1bn, recording a 16% YoY growth, thanks to the robust operational performance, higher Vodafone investment income, and lower interest expense, which all together overshadowed the 27% increase in D&A costs.

• Net operating cash flow landed at EGP 8.3bn, representing 103% of H1 2022 EBITDA.

• In-service capex/sales recorded 14%, while cash capex/sales recorded 39% (31% excluding spectrum fees), landing at EGP 8bn.

• Net debt to annualized EBITDA reached 1.1x down from 1.2x in Q1 2022, with total debt down 6% QoQ.

• H1 2022 FCFF organically reached EGP 0.6bn (noting that FCFF would reach EGP 1.8bn after considering the dividends received from Vodafone Egypt in July 2022).

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

"I am pleased with our excellent interim results year-to-date despite the myriad of global challenges, which include devaluation, inflation, and supply chain pressures. We’ve clearly demonstrated our resilience, as revenue grew organically across all business units. H1 2022 top line grew 17% YoY on strong retail performance with data continuing to be the main driver, comprising 52% of total top line growth. Furthermore, we still managed to maintain healthy margins even though we brought-forward the 2023 salary increase to April 2022—as an incentive for our employees during these challenging times. Additionally, our optimum debt structure enabled us to absorb the adverse effect of the EGP’s devaluation, resulting in a flat effective interest rate of 5.5%. Accordingly, our robust performance has filtered through to an organic FCFF of EGP 0.6bn, in addition to EGP 1.2bn dividends received from Vodafone Egypt in July 2022 under the modified Shareholder’s Agreement.

We look forward to preserving the momentum witnessed on all fronts by monetizing our local & international infrastructure assets to capture the market potential while also rationalizing our incurred costs without compromising on the quality of services provided to end users. On that front, we are eager to leverage our newly-signed national roaming services agreement with Orange Egypt. This step that mirrors our constant efforts to develop our services portfolio while boosting the mobile business margin & the company’s profitability at large.

As always, we will pursue value-accretive opportunities in the market to steer the company towards more success, ultimately maximizing the return to our shareholders.”