Telecom Egypt (ETEL) Q3 2023 earnings summary

Executive summary

• 9M operating-results figures: revenue rose 30% to EGP 41.958bn, EBITDA increased 32% to EGP 17.588bn, and net profit grew 48% to EGP 9.148bn.

• Interim financial statements reported 9M net profit of EGP 455m versus EGP 2.383bn; net finance costs and other non-operating expenses weighed on results.

• Q3 revenue increased 16% YoY to EGP 13.823bn; Q3 net profit was EGP 2.523bn in the statements and EGP 2.453bn in the results presentation.

Financial highlights

• 9M financial statements showed gross profit of EGP 17.366bn and operating profit of EGP 5.986bn; net finance costs were EGP 3.047bn and other non-operating expenses EGP 4.434bn.

• Q3 revenue was EGP 7.9bn retail, up 15%, and EGP 5.9bn wholesale, up 19%; actual revenue was 1.0% above analyst average, while EBITDA and net profit were 0.8% and 8.7% below average.

• 9M investment income reached EGP 3.4bn, up 67% YoY, helping offset higher interest expense.

Outlook and guidance

• FY 2023 budget targets early double-digit revenue growth, a mid-to-high-30s EBITDA margin, in-service CapEx/sales in the early 20s, and FCFF/EBITDA in the mid-20s.

• 9M actuals included 30% revenue growth, a 42% EBITDA margin, 28% in-service CapEx/sales, 37% cash CapEx/sales, and FCFF/EBITDA of -13%.

• 2024 priorities include sustainable profitability, monetizing assets—especially USD-generating assets—agile core-business investment, cost management, and technology and customer-experience improvements.