Telecom Egypt reports 24% revenue growth for 2020

The telco’s full year 2020 results show the highest revenue and growth in the Egyptian telecom market.

Consolidated revenue grew 24% YoY, landing at EGP 31.9bn. The growth was mainly driven by the 39% YoY increase in data revenues, constituting 53% of top line growth, and the doubling of cable projects revenue (+ EGP 1.4bn YoY.)

“This year’s results reflect Telecom Egypt’s fortitude and resilience throughout 2020 and its outstanding ability to accommodate the market’s sudden shift towards digitization during the Covid-19 outbreak. Our overall operational performance has led to a strong full year EBITDA margin of 35%, an all-time high net profit of EGP 4.9bn, and an operating cash flow of EGP 8.3bn, thanks to our strong top line performance and improved revenue mix.”

Adel Hamed, Managing Director and Chief Executive Officer

Customer base grew on all fronts with fixed voice and broadband growing 14% and 20% YoY, respectively, and mobile customers growing 43% YoY, reaching 7.3mn. EBITDA came in at EGP 11.1bn with a strong margin of 35%, exceeding the FY guidance. Normalized EBITDA, excluding the ERP & one off costs, grew 60% YoY.

“I am very pleased that our heavy network investments have enabled us to cope with the unanticipated growth in data demand and subscriptions, and led Egypt’s average internet speeds to more than double, reaching 35 Mbps by the end of the year. This was reflected in our exceptional growth in data revenue (+39%) and subscribers. I would also like to highlight that our diverse business portfolio continues to secure our growth. We see strong momentum in the submarine cable segment with 2Africa recognized in 2020 as the first cable to circle the African continent. Our domestic wholesale business also continues to thrive on the growing demand for data services.”

Adel Hamed, Managing Director and Chief Executive Officer

Normalized operating profit (excluding one-off costs and the ERP) grew 65% YoY thanks to a high margin revenue mix and continued cost containment efforts, despite a 43% YoY growth in D&A. Net profit came in at EGP 4.9bn, growing 10% YoY. Normalizing for one-offs (licensing, depreciation, ERP, FX, & VIS sale), net profit would have grown 39% YoY, reaching an all-time high EGP 5.2bn.

“Going forward, we will capitalize on the additional spectrum that we will soon receive to secure future growth and provide our customers with the best value data products in the market. We also plan to offer a wide range of cutting-edge IT solutions to our local and international customers through our data centres, including Egypt’s largest facility that will be commissioned during 2021.”

Adel Hamed, Managing Director and Chief Executive Officer

Net debt to EBITDA stood at 1.6x, compared to 2.1x (normalized for the ERP) in FY 2019, while the effective interest rate declined to 5.9% vs. 7.1% in FY 2019. Net operating cash flow reached a record high EGP 8.3bn, 3x FY 2019. The BoD proposed a dividend of EGP 0.5 per share for 2020, 2x 2019, representing a dividend yield of 4.4%.

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