Telecom Egypt has posted 88-percent growth in H1 net profit for the period ending June 30.
The growth translates to profits of EGP 3.9 billion ($248.4 million) in the first half of 2021, surging year-on-year from EGP 2.06 billion ($131.2 million) in the same period in 2020.
According to its recently published Earnings Release, earnings before interest, taxes, depreciation and amortization were EGP 6.7 billion ($439.33 million), a 39-percent margin. The figure exceeded the management’s fiscal year guidance on a higher margin revenue mix.*
Operating profit also reached EGP 4.1billion ($261.05 million) on an enhanced revenue mix.
The company attributed the growth in net revenue to steady operational performance, foreign exchange gains and higher investment income from Vodafone. Investment income from Vodafone increased organically by 21 percent year-on-year after excluding a one-off provision reversal in Q1 2021 of EGP 350 million ($22.28 million).
In June, Telecom Egypt and Vodafone Group signed a modified shareholders agreement. The agreement included changes to Vodafone Egypt’s dividend policy, whereby Vodafone Group would pay a one-time dividend of EGP 10 billion ($636.92 million) to shareholders during the 2021 calendar year.
EGP 2 billion ($127.4 million) was paid in March and EGP 8 billion ($509.54 million) in July.
The parties further agreed to a minimum dividend payout ratio of 60 percent of free cash flow moving forward.
Telecom Egypt is Egypt’s primary telephone company established in 1854. Adel Hamed was appointed CEO in 2019.
While the government has a controlling 80-percent stake in the company, Lubna Mohammed Hilal is the single largest individual shareholder with a 0.0006-percent minority stake.
Hilal was previously deputy governor of the Egypt Central Bank. She was ranked the second most influential female public figure in the Middle East and North Africa in Forbes Magazine’s list of the 100 most powerful women in the Middle East and North Africa in 2016.
*Revenue mix is income accruing from taxation to a government during a specified period, usually a year.