FY 2023 key highlights

• Consolidated revenue increased 28% YoY reaching EGP 56.7bn, with data being the largest contributor with 18% YoY growth, followed by infrastructure, IDD and cable projects growth of 27%, 76%, and 64%, respectively.

• Customer base for fixed voice and broadband grew 8% and 9% YoY, respectively, while mobile customer base was stable YoY.

• EBITDA up 30% YoY, marking a robust 40% margin to record EGP 22.7bn - just ahead of management's guidance. This was mainly driven by strong operational results and savings from the new national roaming agreement, which offset rising costs due to inflation.

• Operating profit increased 28% YoY on higher operating performance, offsetting 27% higher direct costs.

• Net profit increased by 25% YoY to reach EGP 11.5bn.

• In-service capex landed at EGP 20.3bn (representing 36% of revenue). Cash capex, including license fees, reached EGP 26.4bn. It is worth mentioning that the cash CapEX includes around EGP 2bn for NUCA, Hayat Karima and digitization projects, which the government finances.

• Net operating cash flow landed at EGP 17.0bn. Meanwhile, FCFF reached a negative EGP 3.6bn, mostly as a result of expediting vendor payments to meet CapEx requirements and protect against anticipated FX volatility.

• Net debt/EBITDA reached 1.7x vs. 1.4x in FY 2022 due to currency devaluation, as 66% of the debt is foreign currency denominated.

• Dividend distribution proposed by the BoD is EGP 1.5/share.

Mohamed Nasr, Managing Director and Chief Executive Officer, commented:

"2023 was a very strong year for Telecom Egypt. Consolidated revenue in Q4 amounted to EGP 14.7bn, up 23% YoY, while FY 2023 amounted to EGP 56.7bn, up 28% YoY. Although market headwinds continued to challenge us, we remained focused on our strategy and forged ahead with our investment plans to support our growth opportunities, strengthen our partnerships and improve our operations—all of which contributed to the great results you see today.

Our customer base continues to grow, marking an 8% and 9% YoY increment for fixed voice and broadband, respectively; meanwhile, mobile customer base was largely flat at the end of FY 2023, but began to grow again at the start of 2024.

EBITDA margin surpassed our guidance, thanks to exceptional operational results and major cost savings from the national roaming agreement, which came into effect at the start of 2023.

We continued to strategically procure settle our CapEX requirements upfront, as such FCFF was strained, amounting to a negative EGP 3.6bn, mainly due to the increase in vendor payments as a tool to hedge against expected FX fluctuations in 2024, and other unforeseeable risks given the current volatile situation in the region.

As we enter 2024, in addition to the price up that already came into effect starting January—which I believe will greatly support our financial position—we remain committed to driving business success with customer-centric innovation strategies. Our focus will be on improving existing services and product offerings, as well as adding new products and services—such as expanding our submarine cable footprint and 5G services. I’m confident that our action plan will unlock Telecom Egypt's full potential and ensure that it is a consistently high-performing business that delivers increased shareholder value. On that note, on the back of these fantastic results, we distributed EGP 1.5 per share.”