Telecom Egypt (ETEL) Q2 2024 earnings summary

Executive summary

• H1 revenue rose 35% to EGP 37.953bn and EBITDA increased 29% to EGP 15.453bn; the operating update reported net profit of EGP 6.511bn, down 3% YoY.

• Retail pricing and customer growth, wholesale activity and international revenues supported growth; higher interest expense and FX losses weighed on earnings.

Financial highlights

• Q2 revenue reached EGP 20.466bn, up 44% YoY; EBITDA rose 40% to EGP 8.143bn and operating profit increased 45% to EGP 4.801bn.

• Q2 net profit was EGP 2.629bn, down 9% YoY, in the operating update; interim financial statements recorded Q2 net profit of EGP 2.693bn versus EGP 1.729bn a year earlier.

• H1 operating profit increased 18% to EGP 8.417bn in the operating update; H1 net profit margin was 17%, down from 24%.

• Interim financial statements recorded an H1 net loss of EGP 14.762bn, with finance costs of EGP 21.846bn and net finance costs of EGP 21.520bn.

• H1 foreign-currency translation losses in the interim financial statements were EGP 6.404bn, versus EGP 3.874bn in 2023.

Outlook and guidance

• FY 2024 targets: mid-double-digit revenue growth, EBITDA margin in the high 30s, in-service CapEx/sales in the mid-20s and FCFF/EBITDA in the early 40s, with mobile-license CapEx excluded where specified.

• H1 actuals were 35% revenue growth, 41% EBITDA margin, in-service CapEx/sales of 21% and FCFF/EBITDA of -26%.

• Priorities include optimizing future CapEx, improving customer experience, monetizing infrastructure and pursuing regional data-hub ambitions.