Telecom Egypt Achieves 35% Revenue Growth in H1 2024, Driven by Data and Capacity Sales

In the first half of 2024, Telecom Egypt demonstrated strong financial performance, with consolidated revenue surging by 35% year-on-year, reaching EGP 38.0 billion. This growth was largely driven by a 46% increase in Data revenue within the Retail segment, which accounted for nearly half of the overall growth. International Direct Dialing (IDD) and Capacity Sales also saw significant gains, rising by 51% and 103% respectively. The customer base expanded across all segments, with Fixed Voice and Fixed Broadband subscribers both increasing by 8%, while Mobile subscribers grew by 4% year-on-year.

EBITDA rose to EGP 15.5 billion, marking a 29% increase from the previous year and maintaining a healthy margin of 41%. This was achieved through a combination of enhanced revenue mix and cost optimization efforts, despite ongoing inflationary pressures. However, net profit remained flat at EGP 6.5 billion, with a margin of 17%. The company managed to offset the impact of a 2.6x rise in interest expenses and EGP 0.5 billion in foreign exchange losses caused by currency devaluation through solid operational growth and a 52% increase in income from Vodafone Egypt (VFE).

In terms of capital expenditures, in-service CapEx amounted to EGP 8.0 billion, representing 21% of sales, while Cash CapEx reached EGP 27.4 billion, covering 80% of the total Cash CapEx budgeted for the year. The increase in Cash CapEx was partially attributed to foreign currency appreciation and vendor financing payments, which totaled EGP 7.5 billion in the first half of the year.

Telecom Egypt’s performance in the first half of 2024 exemplifies our resilience in navigating complex macroeconomic challenges, including currency devaluation and inflationary pressures, while sustaining robust growth.

Our total revenue for the period surged by 35% YoY, reaching EGP 38.0 billion, underscoring our strong market position and the effectiveness of our diversified service portfolio. Notably, our Retail segment revenue soared by 40% YoY, driven by a 46% increase in Data revenue and expansion across all Retail segments. This growth reflects our competitive edge and dedication to delivering exceptional value to our customers. Furthermore, our international operations, including ICA and IC&N, achieved remarkable annual growth of 58% and 28%, respectively, benefiting from foreign currency appreciation and higher traffic volumes. Despite the impact of inflation on rising costs, our EBITDA reached EGP 15.5 billion, with a margin of 41%, highlighting our adept cost management, effective infrastructure monetization, strategic price adjustments, in addition to leveraging the continuously growing data market locally and internationally, which is considered one of the principle drivers for the company’s revenue growth.

Mohamed Nasr, Managing Director and Chief Executive Officer, Telecom Egypt

The company’s net debt-to-EBITDA ratio rose to 2.4x in H1 2024, up from 1.7x at the end of 2023, primarily due to currency depreciation. Free cash flow to the firm (FCFF) was recorded at EGP -10.4 billion, impacted by the vendor financing payments and the EGP 6.4 billion related to license fees. However, when excluding license fees and factoring in the EGP 3.1 billion in dividends received from VFE in July 2024, FCFF stands at EGP -958 million.