REG - Telecom Egypt S.A.E - Q2 2014 Consolidated Results (Replacement) <Origin Href="QuoteRef">ETEL.CA</Origin>
29/10/2014 13:11
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RNS Number : 2428P
Telecom Egypt S.A.E
15 August 2014
REPLACEMENT: Telecom Egypt Q2 2014 Consolidated Results
Cairo, 15 August, 2014:Telecom Egypt (te) (Ticker: ETEL.CA; TEEG.LN), has made
a correction to its Q2 2014 earnings announcement released on 13 August 2014
at 07.45 (RNS No 9927O). The changes are as follows:
In the earning release published 13 August 2014 the Q2 2014 quarter only
figures:
- Stated a net profit (NPAT) of EPG 994 million. This figure should have
been stated as EGP 1,024 million, delivering a +14.3% increase on Q2 2013.
- Stated a net profit (NPAT) margin of 25.7%. This figure should have been
stated as 26.5%.
- Stated Earnings Per Share (EPS) of EPG 0.58. This figure should have
been stated as EGP 0.60 delivering a +14.3% increase on Q2 2013.
Please note that there is no change to the accompanying financial statements.
The full revised text of the earning release can be found below:
Telecom Egypt (te) (Ticker: ETEL.CA; TEEG.LN), today announced its
consolidated financial results for the second quarter, ending 30 June 2014.
The financial statements have been prepared in accordance with Egyptian
Accounting Standards.
Chief Executive Officer's Statement
"Our performance in the second quarter of 2014 tells a story of keen
commercial execution and focused delivery against our five year business plan.
We have taken positive management action on the areas of the business within
our control, while we await the final mobile award.
"Every one of our business units has delivered revenue growth when compared to
both the previous year and the previous quarter, allowing us to record the
highest quarterly revenue result in the history of the company.
"After just a few years of full operations, in Q2 2014 our International
Customers & Networks business has made its most significant contribution to
te's overall quarterly performance to date; delivering 25.8% of total sales
revenues. Our medium term plans as a total telecoms operator will once again
extend our reach into retail services and redress the wholesale bias that has
developed in our business."
"Critically, we have grown top line performance without sacrificing our
profitability. The improvement in revenues has been achieved while improving
our EBITDA margin, when compared with the first three months of the year, to
arrive at 44.7%.
"Finally, the significant progress made during the period, alongside
management's confidence in the performance being delivered, has led the
management to propose to the company's Board of Directors a US 5 Cent per
normal share interim cash dividend under the account of profits for the year
ending 31 December 2014, and now it is subject to shareholder approval at the
Ordinary General Assembly of the Company."
Revenues by Lines of Business:
___________________________________
Home Services 20.1
Enterprise Solutions 15.2
Domestic Wholesale 17.7
International Carrier Affairs 21.2
International Customers & Networks 25.8
Home Services Business Unit:
___________________________
HS BU 1,543 1,464 5.4% 779 742 5.0%
Home Voice Revenue Growth % -16.9% -19.9% -20.3% -18.6%
Home Data Revenue Growth % 32.1% 25.3% 33.0% 24.6%
Home Fixed Line Subscribers Mn 5.59% 5.95% 5.59 5.95
Home ADSL Subscribers 000's 1,717 1,368 1,717 1,368
Home ARPU EGP/Month 25.18 25.99 25.02 26.42
The Home Services business unit reported a 5.0% year-on-year increase in
revenues for the second quarter 2014, and a 5.4% increase when compared to H1
2013.
Q2 2014 has been a period of continued promotional activity: including te's
new fixed line promotion priced at EGP 50; its Kalamy product, benchmarked
with its successful and rewarding performance.
Customer demand for broadband continued the momentum experienced in the first
three months of the year, with 75 thousand net ADSL subscriber additions
taking te's retail ADSL market share to 63.8% in the second quarter 2014. At
the half year point - 30 June 2014 - te's ADSL subscriber base stands at more
than 1.8 million, as the broadband business benefits from te's ability to
offer higher speeds at affordable prices.
Enterprise Solutions Business Unit:
________________________________
ES BU 1,013 922 9.9% 583 479 21.7%
Enterprise Service Revenue Growth % -9.8% -9.3% -11.3% -5.4%
Enterprise Data Revenue Growth % 13.3% 17.5% 14.4% 12.7%
Other Subsidiary Revenue Growth % -20.2% 10.7% -3.1% 4.9%
Enterprise Fixed Line Subscribers Mn 1.06 1.08 1.06 1.08
Enterprise ADSL Subscribers 000's 115 104 115 104
Enterprise ARPU EGP/Month 67.07 73.57 62.77 71.97
During the second quarter of 2014, te's Enterprise business unit, which
primarily services the Egyptian SME sector, public sector bodies and financial
industries, experienced a significant uplift in revenues.
Second quarter revenues have increased by EGP 153 million or 36% versus Q1
2014. Revenues were 9.9% up on H1 2013 and EGP 104 million or 21.7% up versus
Q2 2013, as the business unit progressed with commercializing new urban
developments. Notably, te continued to target the Egyptian banking sector and
its requirement for high speed and heavy applications with both voice and
video capabilities. This followed the success experienced with new deals on
fiber models in this area during the first three months of the year.
Domestic Wholesale Business Unit:
_________________________________
DW BU 1,228 1,124 9.2% 687 553 24.1%
Domestic Revenue Growth % 20.0% 12.2% 36.2% 21.1%
International Revenue Growth % -5.9% 16.7% 5.7% 19.2%
International Outgoing Minutes % -16.4% -5.3% -16.6% -4.5%
Revenues rose to EGP 1,228 million for the half year 2014, up 9.2% on the same
period in 2013. Revenues increased 26.9% versus Q1 2014 and 24.1% for the
quarter year-on-year, as demand for international infrastructure services and
transmission, primarily relating to data services, increased. Outgoing
international call traffic showed some volume decline as the effects of free
mobile calling applications was felt. However, we managed to derive positive
revenues by modeling the distribution of traffic patterns among different
zones and tiered volumes.
International Carriers Affairs Business Unit:
_________________________________________
ICA BU 1,552 1,692 -8.3% 820 804 2.1%
International Settlement Revenue Growth % -8.3% 42.1% 2.1% 33.6%
International Incoming Minutes Growth % -15.5% 23.8% -2.8% 8.3%
Despite a decrease in revenues between H1 2013 and H1 2014 due to the slowdown
in retail activities in neighboring markets, in the second quarter the
International Carriers Affairs (ICA) business unit reported an increase
compared to the first three months of the year. The business benefited from a
positive trend for revenues relating to international inbound call volumes
terminating in Egypt, met by the terms for effective blended selling rates,
translating to just 2.1% growth when compared with the same period in 2013.
The ICA business unit currently serves 70+ long-term bilateral customers
across all international wholesale voice activities. The business is working
hard to commercialize its new "Role-Sale" approach, a mix between retail and
wholesale, and to introduce new lines of business and explore new markets,
capitalizing on its global footprint and variety of international customers.
International Customers & Networks Business Unit:
_______________________________________________
IC&N BU 1,096 288 280.6% 999 195 412.4%
IC&N Revenues Growth
- Cable Projects % - -100.0% - -
- Ancillary Services (O&M) % 17.0% 26.7% 21.0% 9.2%
- Capacity Sales % -40.1% 13.4% -53.4% 28.6%
The International Customers & Networks (IC&N) business unit has reported a
truly exceptional quarter.
This performance is driven by the conclusion of two major transactions with
the SMW-5 cable system and AAE1 cable system respectively. Both cable systems
were demand created by te management and show that te's terrestrial transit
corridor infrastructure has become a carrier-of-choice for the submarine cable
industry in routing from Asia to Europe.
IC&N reported a 281% and 412.4% increase in revenues when compared with H1
2013 and Q2 2013 respectively, representing record quarterly revenue levels
for this business unit of almost EGP 1 billion.
te Financial Highlights:
_____________________
Income Statement -Summary:
____________________________
Sales Revenue 6,432 5,490 17.2% 3,868 2,773 39.5%
Home Services 1,543 1,464 5.4% 779 742 5.0%
Enterprise Solutions 1,013 922 9.9% 586 484 21.1%
Domestic Wholesale 1,228 1,124 9.2% 684 549 24.6%
Int'l Carriers Affairs 1,552 1,692 -8.3% 820 804 2.1%
Int'l Customers & Networks 1,096 288 280.6% 999 195 412.4%
EBITDA 2,535 1,787 41.9% 1,730 840 105.9%
EBITDA Margin % 39.4% 32.5% 44.7% 30.3%
EBIT 1,809 1,645 9.9% 1,219 900 35.4%
EBIT Margin % 28.1% 30.0% 31.5% 32.5%
NPAT 1,543 1,753 -12.0% 1,024 896 14.3%
NPAT Margin % 24.0% 31.9% 26.5% 32.3%
EPS 0.90 1.03 -12.0% 0.60 0.52 14.3%
Costs:
______
te retains a very careful approach to cost management. Operating expenditure
excluding employee costs increased broadly in line with year-on-year revenue
gains. Cost increases during the period related primarily to the 10% annual
salary increase and the structured incentive rewards program, both of which
came into effect as of the first quarter 2014.
EBITDA:
________
EBITDA for the second quarter 2014 was EGP 1,730 million, an increase of
105.9% compared to the Q2 2013, directly attributable to higher revenues and
careful control of operating expenditures.
Income from Investment:
_______________________
Total Income from investments, mainly representing te's stake in VFE, was EGP
218 million. During the period under review, VFE generated revenues of EGP
3,377 million, a decline of 1.9% compared with the same period in 2013.
Closing customers as at 30 June stood at 41.9 million.
(Note: Vodafone Egypt's financial year is from 1 April to 31 March).
Vodafone Egypt Financial Highlights:-
__________________________________
(In EGP Millions)
Jun. 2014 Jun. 2013 % Change Q1 14/15 Q4 13/14 % Change
Total Revenue 3,377 3,441 -1.9% 3,377 3,279 3.0%
Net Profit 486 569 -14.6% 486 343 41.9%
CAPEX 637 206 209.4% 637 791 -19.4%
Vodafone Egypt Operational Highlights:-
_____________________________________
Jun. 2014 Jun. 2013 % Change Q1 14/15 Q4 13/14 % Change
41,938 40,608 3.3% 41,938 42,073 -0.3%
Closing Customers (000's)
-135 2,352 -105.8% -135 162 -183.8%
Net Adds (000's)
23,303 23,787 -2.0% 23,303 22,169 5.1%
Total Voice Minutes (millions)
Net Profit:-
_________
Although, corporate taxes by law increased by 5% starting from Q2 2014 and
will be accounted for retroactively from 1st of January 2014, te's
consolidated Net Profit After Tax for Q2 2014 reached EGP 1,024 million versus
EGP 519 million in Q1 2014, a 97.2% rise. Year-on-year this represents an
increase of 14.3% and a NPAT margin of 26.5%. This translates to an increased
EPS of EGP 0.60.
.
Balance Sheet - Summary:
_________________________
Current Assets 10,585 11,030 -4.0%
Net Fixed Assets 10,893 11,243 -3.1%
Long Term Investments 9,016 8,693 3.7%
Other Long Terms Assets 1,915 1.672 14.5 %
Total Assets 32,409 32,638 -0.7%
Current Liabilities (Excl. STD) 4,280 3,727 14.8%
CPLTD 85 107 -20.9%
LTD 431 475 -9.2%
Other Non-Current Liabilities 8 12 -37.9%
Total Liabilities 4,803 4,322 11.1%
Total Shareholder Equity 27,606 28,316 -2.5%
Total Liabilities & Shareholder Equity 32,409 32,638 -0.7%
Cash Flow - Summary:
_____________________
Net Cash Provided By Operating Activities 1,068 1,296 -17.6%
Net Cash Flows from Investing Activities -887 -146 505.6%
Net Cash Flows from Financing Activities -1,777 -2,324 -23.5%
Net Change In Cash and Cash Equivalents During the Period -1,596 -1,175 35.9%
Translation Differences of Foreign entities 1 3 -76.8%
Cash & Cash Equivalents at the Beginning of the Period 5,644 6,325 -10.8%
Cash and Cash Equivalents at the End of the Period 4,049 5,154 -21.4%
Investment in Infrastructure / Capital Expenditure:
_______________________________________________
Capital expenditure for Q2 2014 reached EGP 376 million versus EGP 143 million
in Q1 2014, up 163.8%. This represented 10.5% of total revenues for the
period. Capital expenditure for the quarter is higher than the previous
quarter reflecting our investments to upgrade our nationwide access network,
from copper-based technologies to modern fiber-based technologies (across four
million ports), a deployment which will enable us to carry more and higher
capacity traffic of a better quality.
Net Debt Position:
_________________
te continues to boast a very healthy balance sheet, with a net cash position
of EGP 3,549 million at Q2 2014, a reflection of the cash generative nature of
te's business.
To download a complete copy of te's Q2 2014 Consolidated Financial Results
Statements and notes to these statements, please refer to the attached pdf:
http://www.rns-pdf.londonstockexchange.com/rns/9927O_1-2014-8-13.pdf
To download a complete copy of te's Q2 2014 Standalone Financial Results
Statements and notes to these statements, please refer to the attached pdf:
http://www.rns-pdf.londonstockexchange.com/rns/9927O_2-2014-8-13.pdf
- Ends -
For Further Information:
Investor Relations Contacts
Mohamed Kamal
General Manager of Investor Relations
Tel: +202 3131 5219
Fax: +202 3131 6115
E-mail: investor.relations@te.eg
Notes to Editors:
……………………….
Within this statement, we may make forward-looking statements regarding future
events or the future performance of the Company. By their very nature,
forward-looking statements involve inherent risks and uncertainties, both
general and specific, and risks exist that the predictions, forecasts,
projections and other forward-looking statements will not be achieved. You
should be aware that a number of important factors could cause actual results
to differ materially from the plans, objectives, expectations, estimates and
intentions expressed in such forward-looking statements. When relying on
forward-looking statements, you should carefully consider the political,
economic, social and legal environment in which Telecom Egypt operates. Such
forward-looking statements speak only as of the time of this release today.
Accordingly, Telecom Egypt does not undertake any obligation to update or
revise any of them, whether as a result of new information, future events or
otherwise other than as required by applicable laws, the Listing Rules or
Prospectus Rules of the United Kingdom Listing Authority, the Egyptian
Financial Supervisory Authority or The Egyptian Exchange. The documents filed
from time to time with these authorities may identify important factors that
could cause actual results to differ materially from those contained in any
forward-looking statements
This information is provided by RNS
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