Telecom Egypt (ETEL) Q4 2023 earnings summary

Executive summary

• FY2023 revenue rose 28% to EGP 56.7bn; reported operating results showed EBITDA of EGP 22.7bn, up 30%, and net profit of EGP 11.5bn, up 25%.

• Audited statements reported FY2023 net profit of EGP 2.39bn versus a net loss of EGP 1.93bn in FY2022, differing from the operating-results net-profit figure.

• Q4 revenue rose 23% to EGP 14.7bn, while net profit fell 23% to EGP 2.3bn amid higher interest expense and lower FX gains.

Financial highlights

• Q4 EBITDA was EGP 5.1bn, up 24% YoY; operating profit rose 69% to EGP 1.7bn, while EPS fell 23% to EGP 1.36.

• Audited statements reported gross profit of EGP 22.20bn and operating profit of EGP 7.48bn; net finance costs were EGP 9.30bn, and other operating expenses included EGP 3.64bn of FX losses.

• FY2023 operating cash flow was EGP 21.21bn in the audited cash flow statement; investing activities used EGP 23.91bn, led by property and equipment purchases.

Outlook and guidance

• FY2024 budget targets mid-double-digit revenue growth and a high-30s EBITDA margin, versus FY2023 growth of 28% and a 40% margin.

• FY2024 in-service CapEx/sales is budgeted in the early 20s%; FY2023 in-service CapEx/sales was 36%, with cash CapEx/sales at 47%.

• FY2024 FCF/EBITDA is budgeted in the early 40s%, versus FY2023 at -6.5% excluding spectrum and 2G license payments.

• 2024 priorities include customer-centric innovation, improved offerings, submarine cable expansion and 5G services; January price increases were expected to support the financial position.