Telecom Egypt S Regulatory News (TEEG)

15 Nov 2007 07:03

Telecom Egypt S.A.E15 November 2007 Telecom Egypt Announces Nine Months 2007 Consolidated Results Cairo, 15 November, 2007: Telecom Egypt (TE) (Ticker: ETEL.CA; TEEG.LN), todayannounced its consolidated financial results for the nine months ending 30September, 2007. Financial statements have been prepared in accordance withEgyptian Accounting Standards. Highlights for the nine month period include: • Total revenues reached EGP 7.5 billion, an increase of 7.8% on the same period in 2006. • EBITDA Before Provisions were EGP 4.1 billion, up 5.5% year-on-year • EBITDA Margin Before Provisions of 55.4% • Net Profit after Tax was EGP 1.7 billion, an increase of 12.3% in comparison to 2006 • Earnings per share (EPS) were EGP 1.00, up 12.3% year-on-year • Ongoing rationalization results in nine month capex related cash-flows of EGP 659 million • Total fixed line subscribers reached 11.03 million, up 3% on the first nine months of 2006 • Monthly ARPU at EGP 55.5 an increase of 1.3% over the previous quarter • Share of the retail ADSL market is 49%, with 152% subscriber growth during the first nine months of 2007 • Positive contribution from Vodafone Egypt of EGP 796.7 million in the first nine months of the year Chairman's statement Commenting on the company's results for the first nine months of 2007, AkilBeshir, Chairman and CEO of Telecom Egypt, said: "Today's announcement again demonstrates a sustained and strong growth inrevenues and net profit for Telecom Egypt in line with our expectations. Furtherto my last update, we continue to deliver on the strategy while adapting to arapidly changing telecoms landscape in Egypt. "Our fixed line customer base continues to be one of the largest in the region,delivering total revenues for the first nine months of 2007 of EGP 7.5 billion.These results once again show the evolution in our core business, with revenuesfrom wholesale services, which includes infrastructure leasing, representing 34%of our total revenues. "Underpinned by our commitment to tight cost controls and a prudent financialstrategy, our margins also remain robust. We ended the nine month period withan improved 23% net profit margin. "Our strategic initiative, TE North, is progressing as planned and as you cansee from today's announcement operational contracts are being put in place withcustomers that we feel confident share our vision and drive for this newventure. "TE's Internet and data services arm, TE Data, continues to deliver healthyfinancial and operational performances. In total it now services almost 50percent of the fast-growing Egyptian ADSL market with 172,767 subscribers.Revenues from Internet and data services have increased by 73 percent incomparison to the same nine month period in 2006. "As the mobile telecoms market continues to grow in Egypt we are also reapingthe benefits of our important investment in Vodafone Egypt, one of the leadingmobile providers in the country, both financially and strategically. Ourcooperation with the Vodafone group begins to yield tangible results with theroll-out of Vodafone Shop-in-Shops in Telecom Egypt's Centrals. Suchinitiatives should deliver benefits to both parties, and in turn our respectivecustomers, in the future." Financial Review Revenues Total consolidated operating revenues for the nine month period to 30 September2007 rose 7.8 percent to EGP 7.5 billion. This was underpinned by continuingdemand for TE's wholesale services from other telecom operators and an upturn inlocal call revenues during the third quarter post number changes. Retail services Revenues for the first nine months of 2007 increased to EGP 4.9 billion,compared to EGP 4.8 billion for the same period in 2006. This increase was mainly driven by an increased take up of Internet and dataservices from TE's subsidiary - TE Data and an increase in access revenue by 7%.Internet and data revenues increased by 73% from EGP 126 million to EGP 218million for the first nine months of 2006 and 2007 respectively. TE increased the number of ADSL subscribers by 152 percent to 172,767 in thefirst nine months of 2007, representing a 48.9 percent share of the EgyptianADSL market. Wholesale services Continued demand from other telecom operators for use of our state-of the artinfrastructure has again translated to an increase in wholesale revenues. Total wholesale revenues for the first nine months of 2007 were EGP 2.5 billion,compared to EGP 2.0 billion for the same period in 2006. Domestic wholesale revenues increased by 68 percent to EGP 572 million, drivenby mobile to fixed interconnection and other wholesale revenue. Firstly, theincrease in mobile to fixed was as a result of increased traffic generated bymobile operators offering promotions to their customers. Secondly, TE's incomefrom leasing its extensive infrastructure to other telecom providers hascontinued to grow substantially, almost doubling in a year-on-year comparisonfor the same nine month period, from EGP 178 million in 2006 to EGP 354 millionin 2007. EBITDA/EBIT Consolidated EBITDA before provisions for the first nine months of 2007 reachedEGP 4.1 billion, a 5.5% increase on the same period in 2006. This resulted in anEBITDA margin before provisions, within management expectations, of 55.4percent. Meanwhile, EBIT for the nine months ended 30 September 2007 was 16.7% up on theprevious year, reaching EGP 2.5 billion. Income from Investments Total income from TE's investments for the period was EGP 753 million, includingincome from Vodafone Egypt. During the period under review Vodafone Egypt, one of three licensed providersof mobile communications in Egypt, continued to demonstrate sound operationaland financial management. As of 30 September 2007 (representing the first six months of Vodafone Egypt'sfinancial year), Vodafone Egypt had approximately 11.7 million active customers,generating a total of 10.4 billion voice minutes. This shows a substantialincrease in comparison to the same period in 2006, when Vodafone Egypt had 7.8million active customers generating 6.3 billion voice minutes. Net profit Consolidated Net Profit for the period was EGP 1.7 billion, an increase of 12.3percent compared to the same period in 2006. This translates to EPS of EGP 1.0. Debt TE's net debt position as of 30 September 2007 was EGP 4.5 billion. Thisrepresents a reduction of EGP 2.3 billion in comparison to 31 December, 2006,when TE's net debt rose to EGP 6.8 billion as a result of the acquisition of anadditional 19 percent stake in Vodafone Egypt. TE Financial Highlights 9 Months Period Ending September Previous Quarter ComparisonIn EGP 000's (Except Per Share Data) Sept. 2007 Sept. 2006 % Change Q3 2007 Q2 2007 % Change Sales Revenue 7,477,744 6,933,633 7.8% 2,601,286 2,498,699 4% EBITDA Before Provisions 4,140,134 3,923,541 5.5% 1,392,622 1,376,597 1.2%Margin 55.4% 56.5% 53.5% 55.1% EBITDA After Provisions 3,877,027 3,773,057 2.9% 1,406,984 1,118,281 26%Margin 51.8% 54.4% 54.1% 44.8% EBIT Before FX Gains or Losses 2,574,249 2,236,521 15.1% 998,621 701,517 42%Margin 34.4% 32.3% 38.4% 28.1% EBIT 2,497,849 2,139,862 16.7% 942,567 695,023 36%EBIT Margin 33.4% 30.9% 36.2% 27.8% Profit Before Taxes & Minority Interest 2,076,794 1,942,251 6.9% 815,697 551,136 48% Consolidated Net Profit 1,702,848 1,516,107 12.3% 706,133 413,247 71%Net Profit Margin 22.8% 21.9% 27.1% 16.5% EPS (EGP) 1.00 0.89 12.3% TE Operational Highlights 9 Months Period Ending September Previous Quarter Comparison Sept. 2007 Sept. 2006 % Change Q3 2007 Q2 2007 % Change Number of Fixed Line Subscribers 11,031,595 10,720,603 3% 11,031,595 10,958,248 1% Fixed Line Subscribers Net Additions 223,917 324,455 -31% 73,347 60,433 21% ARPU (EGP/Month) 55.5 57.7 -3.7% 55.9 55.2 1.3% Number of ADSL Subscribers 172,767 68,550 152% 172,767 134,873 28.1%Retail ADSL Market Share 48.9% 41.2% 19% 48.9% 47.7% 2% Vodafone Egypt Financial Highlights 6 Months Period Ending Previous Quarter Comparison SeptemberIn EGP mn Sept. 2007 Sept. 2006 % Change Q2 2007 Q1 2007 % Change Total Revenue 5,035 3,840 31% 2,607 2,428 7% Net Profit 1,346 1,289 4% 647 699 -7% Capex 1,297 709 83% 630 668 -6% Vodafone Egypt Operational Highlights 6 Months Period Ending Previous Quarter Comparison September Sept. 2007 Sept. 2006 % Change Q2 2007 Q1 2007 % Change Active Customers (000's) 11,693 7,767 51% 11,693 10,327 13% Total Voice Minutes (in millions) 10,385 6,331 64% 5,591 4,794 17% To download a complete copy of Telecom Egypt's 3Q 2007 consolidated financialresults statements and notes to these statements, please click the followinglink: http://www.rns-pdf.londonstockexchange.com/rns/7489h_-2007-11-14.pdf To download a complete copy of Telecom Egypt's 3Q 2007 standalone financialresults statements and notes to these statements, please click the followinglink: http://www.rns-pdf.londonstockexchange.com/rns/7489h_1-2007-11-14.pdf - Ends - For further information: Investor Relations Contacts Alia A. AlloubaAssistant Manager Investor RelationsTelephone: +202 25788787Fax: +202 25789314 E-mail: investor.relations@telecomegypt.com.eg Notes to Editors: Within this statement, we may make forward-looking statements regarding futureevents or the future performance of the Company. By their very nature,forward-looking statements involve inherent risks and uncertainties, bothgeneral and specific, and risks exist that the predictions, forecasts,projections and other forward-looking statements will not be achieved. Youshould be aware that a number of important factors could cause actual results todiffer materially from the plans, objectives, expectations, estimates andintentions expressed in such forward-looking statements. When relying onforward-looking statements, you should carefully consider the political,economic, social and legal environment in which Telecom Egypt operates. Suchforward-looking statements speak only as of the time of this release today.Accordingly, Telecom Egypt does not undertake any obligation to update or reviseany of them, whether as a result of new information, future events or otherwiseother than as required by applicable laws, the Listing Rules or Prospectus Rulesof the United Kingdom Listing Authority, the Egyptian Capital Markets Authorityor the Cairo and Alexandria Stock Exchange. The documents filed from time totime with these authorities may identify important factors that could causeactual results to differ materially from those contained in any forward-lookingstatements. About Telecom Egypt Telecom Egypt (TE), Egypt's incumbent telecommunications operator, started itsoperations in 1854 with the first telegraph line in Egypt. Then it wascorporatized in 1998 to replace the former Arab Republic of Egypt NationalTelecommunication Organization (ARENTO). The Company is the largest provider offixed-line services in the Middle East and Africa with 11.03 million subscribersas at the end of September 2007. TE provides retail telecommunication services including access, local, longdistance and international voice, Internet and data, and other services. Thecompany also provides wholesale services including bandwidth capacity leasing toISPs, and national and international interconnection services. Telecom Egypt'sservices also include the provision of narrowband and broadband internet accessthrough its subsidiary TE Data. TE Data has active operations in Egypt andJordan. TE currently participates in the mobile segment in Egypt by providing mobileinterconnectivity through its current, increased 44.79% holding in VodafoneEgypt, one of the three existing Egyptian mobile operators. TE's shares and GDRs (Ticker: ETEL.CA; TEEG.LN) are traded on the Cairo andAlexandria Stock Exchanges and the London Stock Exchange. This information is provided by RNS The company news service from the London Stock Exchange