Telecom Egypt (ETEL) Q1 2023 earnings summary

Executive summary

• Revenue reached EGP 13,958,661 thousand, up 48.2% YoY; EBITDA rose 71.7% to EGP 6,142mn, with a 44% margin.

• Reported net profit was EGP 3,813mn, up 179% YoY; adjusted net profit was EGP 4.104bn, up 144%.

• Mobile customers increased 22% YoY to 12.4mn, with customer growth across fixed voice and broadband as well.

• Foreign-currency translation losses on balances and transactions were EGP 3,344,443 thousand, versus EGP 893,241 thousand in Q1 2022.

Financial highlights

• Operating profit increased 107.5% YoY to EGP 3.933bn; operating margin rose 805 bps to 28%.

• Revenue grew 48.2% YoY and 16.3% QoQ; EBITDA rose 71.7% YoY and 50.2% QoQ.

• EPS was EGP 2.23, up 179% YoY; net profit margin expanded 1,281 bps to 27.3%.

• Operating cash flow rose 121% YoY to EGP 5,787mn.

Outlook and guidance

• FY 2023 budget targets early double-digit revenue growth and an EBITDA margin in the mid-to-high 30s.

• FY 2023 budget targets in-service capex/sales in the early 20s and FCF/EBITDA in the mid-20s; Q1 actuals were 9% for each.

• Strategic priorities include broadening and diversifying services, growing the customer base, improving customer experience and pursuing a compelling financial model.