Telecom Egypt Announces First Quarter 2010 Consolidated Results
Cairo, 13 May 2010: Telecom Egypt today announced its consolidated financial results for the First Quarter ending 31 March 2010. Financial statements have been prepared in accordance with Egyptian Accounting Standards.
Highlights for the First Quarter 2010 period include:
§ Total Consolidated Revenues reached EGP 2,503 million.
§ EBITDA Before Provisions was up 1% reaching EGP 1,364 million, delivering a margin of 54.5%.
§ Net Profit After Tax reached EGP 992 million, translating to a net profit margin of 39.6%.
§ Earnings Per Share (EPS) for the period reached EGP 0.58.
§ Capex related cash-flows were up 73.8% at EGP 309 million on the same period in 2009.
§ As at 31 March 2010, total fixed line subscribers stood at 9.3 million.
§ Retail ADSL market share reached 61%, up 2.5% on the same period in 2009.
§ Positive contribution of share of profits from Vodafone Egypt of EGP 300 million.
Chief Executive Officer’s statement
Commenting on the first quarter results of 2010, Tarek Tantawy, Chief Executive Officer of Telecom Egypt, said:
“As recent events have shown, the effects of the global financial crisis are not yet over. Despite this, TE has once again proven its ability to deliver solid profitability in a highly competitive operating environment. Our performance during the first quarter should once again be regarded as very solid. During the first three months of 2010, we have stabilized revenues, further reined in costs and, as a result, increased our margins. In the first quarter of 2010, this resulted in bottom line growth of 3.2% to arrive at EGP 992 million. This translates to a net profit margin of more than 39%.
“In Egypt, the telecommunications land grab continues and our response to the aggressive price reductions made by mobile operators has already started to yield some results. Our promotions have been compelling and have resulted in a number of subscribers choosing Telecom Egypt for both quality and value. In the first quarter of 2010, all voice revenue categories showed a marked improvement on the levels recorded in the final quarter of 2009.
“Lower subscriber numbers have had no demonstrable impact on our top line. Our diversified business model has continued to deliver stability in our revenue base, with advances in wholesale revenues offsetting any short- term pressure in retail revenues as a result of our promotional activities. Revenues from our wholesale business are a significant and growing component of our revenue base, representing 48% of total service related revenues recorded in the quarter. During the first quarter of the year, total wholesale revenues increased 14% year-on-year to EGP 1,207 million as a result of the continued momentum in activity from third party operators including ISPs. For the first time we also recognized revenues from our submarine cable projects, as the build-out has been substantially completed.
“We have already met the challenges of market liberalization head-on, diversifying our business to capture growth in mobile and data markets. We are now moving into the next stage of our evolution – and the needs of the customer sit at the centre of this proposition. The broadband opportunity remains one of the cornerstones of our future. It is a market which is becoming more competitive, but we are working closely with TE Data to ensure we retain our leading market share. TE Data, our fully owned internet and data arm, made significant progress during the first quarter – increasing its customer base by 42% in comparison with the first quarter of 2009.
“We continue to demonstrate the tangible benefits of our participation in the mobile segment through our Wholesale Business Unit, but our long-standing investment in Vodafone Egypt (VFE) has also consistently delivered a solid result. In a highly dynamic market, VFE has once again demonstrated significant success in subscriber acquisitions, adding 30% to its total base by its year end (31 March 2010) when compared with 31 March 2009. It now has a 43% market share and generated almost 40 billion voice minutes. As a result, our VFE investment contributed an attributable income for the period of EGP 300 million”.
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