Telecom Egypt Profits Rise Despite Algeria Impairment
Telecom Egypt reported a rise in 2007 profits, driven by higher Internet, data and wholesale revenue, and an increased contribution from Vodafone Egypt Telecommunications Company which offset an impairment for its investment in Algeria.
Net profit for the 12 months to Dec. 31 was 2.53 billion Egyptian pounds ($466.3 million), up over 4% from EGP2.43 billion in 2006. Sales revenue rose 5% to EGP9.99 billion, from EGP9.52 billion.
The company said it booked a EGP1.1 billion positive contribution from its stake in Vodafone Egypt Telecommunications Company , up from EGP710 million in 2006.
"2007 was a year of focused growth in our subscriber base. The fourth quarter was particularly strong in terms of net additions, resulting from the market's positive response to our promotional activities," said Akil Beshir, Chairman and CEO of Telecom Egypt.
The U.K.-listed Egyptian telecommunications provider is also the largest provider of fixed-line services in the Middle East with more than 10.8 million customers as of December-end 2006.
Its fixed-line subscriber base reached 11.23 million, up 4% on the year, while its share of the ADSL retail market was 52% after subscriber growth of 141%.
The profit rise came despite a EGP59 million impairment for an operating loss at Consortium Algerian De Tele- Communications, in which it holds a stake. The impairment meant earnings before interest, taxes, depreciation and amortization, Ebitda, was down 2% on the year at EGP5.22 billion. Ebitda before the charge was up 2%.
Analysts said the results had exceeded expectations. "We expected a flat net profit because the results for the first nine months were not significant but the Vodafone addition pushed the net profit up," said Walaa Hazem, telecom analyst at HC Brokerage in Cairo, Egypt.
Egypt has a population of more than 70 million residents and tele-density of 14.88% as at December 2006, a reflection of the company's future growth potential.
Dow Jones Newswires