Emirates Telecommunications Group Company (EAND) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered strong performance across all verticals, with consolidated H1 revenue up 6.3% year-over-year to AED 28.3 billion and profit attributable to owners rising 16.7% to AED 5.5 billion; EPS increased to AED 0.63.

• Net profit after federal royalty rose 25% year-over-year to AED 3.2 billion in Q2, with a net profit margin of 22%.

• Aggregate subscriber base reached 175 million, up 6% year-over-year, with robust additions in UAE, Egypt, Pakistan, and Moov Africa.

• Regulatory turbulence in Morocco impacted Maroc Telecom, including a court ruling requiring a provision of AED 2.3 billion for damages.

• Interim dividend of 41.5 fils per share for H1 2024 was declared, with a progressive dividend policy to enhance shareholder returns.

Financial highlights

• H1 2024 revenue reached AED 28.3 billion, up 6% year-over-year in constant currency.

• H1 2024 EBITDA rose 2% year-over-year in constant currency to AED 12.9 billion, with a margin of 46%.

• Net profit attributable to owners was AED 5.5 billion, up 16.7% year-over-year.

• Operating free cash flow for Q2 2024 increased 3% year-over-year to AED 4.8 billion (34% margin).

• Net debt/EBITDA at 0.91x, with total consolidated debt at AED 47.7 billion as of June 2024.

Outlook and guidance

• H1 2024 performance aligns with or is ahead of full-year guidance for revenue growth and capital spending.

• Telecom revenue growth expected at mid-single digits in constant currency for FY 2024; EBITDA margin guidance at ~49%.

• CAPEX intensity guidance at ~16% for FY 2024.

• New federal royalty regime applies a 38% rate on UAE net profit, with a minimum combined royalty and corporate tax of AED 5.7 billion annually; 9% corporate tax effective from 1 January 2024.