Telecom Egypt Announces First Quarter 2009 Consolidated Results

Mergers, Acquisitions and Financial Results

Telecom Egypt announced its consolidated financial results for the first three months of 2009, ended 31 March 2009. Financial statements have been prepared in accordance with Egyptian Accounting Standards.

Highlights for first quarter include:

- Total Consolidated Revenues of EGP 2,526 million, up 6% on Q1 2008.

- EBITDA Before Provisions was EGP 1,351 million, delivering a margin of 53%.

- Net Profit After Tax was EGP 961 million representing an increase of 72% on the same period in 2008 and translating to a net profit margin of 38%.

- Earnings Per Share (EPS) increased to EGP 0.56, from EGP 0.33 in the same period in 2008.

- Capex related cash-flows were EGP 178 million.

- Total fixed line subscribers were 11.6 million, as at 31 March 2009.

- TE Data ADSL subscribers increased by 83% on the same period in 2008 to reach 477 thousand.

- Positive contribution of share of profits from Vodafone Egypt of EGP 350 million.

Commenting on the first quarter results, Akil Beshir, Chairman and CEO of Telecom Egypt, said:

"Amid challenging economic conditions and significant market volatility, I am pleased to report a very solid first quarter performance for Telecom Egypt. Not only are these achievements testament to TE's resilience and determination, against a backdrop of a dynamic and aggressive telecommunications market, they are also an endorsement of our stable business model.

"Once again, we have recorded year-on-year revenue growth across both our retail and wholesale businesses. Our retail revenues have increased modestly year-on-year to EGP 1,468 million, largely driven by an increase in access revenues and internet and data revenues. While voice revenues continue to experience some pressure from mobile substitution, our extensive and modern network enables us to reap the benefits of the resulting increase in mobile traffic through our wholesale revenues which increased 11% year on year.

"Our EBITDA before provisions margin remains comfortably within management expectations at 53 percent, reflecting prudent financial management. This has fed directly through to a 72 percent year-on-year increase in net profit, which reached EGP 961 million for the first three months.

"TE continues to benefit from its investment in Vodafone Egypt, which has increased its customer base by 35 percent and total voice minutes by 36 percent year-on-year, translating to a EGP 350 million contribution to our first quarter profits.

"TE's management team is working hard to help ensure we continue to generate solid returns throughout 2009. We are not alone in facing an uncertain economic environment, which in itself presents challenges for TE and its customers. However, I am confident that our solid financial footing allows us to maintain significant flexibility in the business."

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