Telecom Egypt 2014 Net Profit Declines to EGP2.031bn on One-Offs
Telecom Egypt (ETAL-CA) (TE) announced on Tuesday its consolidated financial results for the full year, ending 31 December 2014.
Net Profit after Tax for the year recorded EGP2.031 billion versus EGP2.958 Billion in FY 2013. The decline was mainly attributable to a number of one-offs. The additional EGP149 million for provisions formed to hedge for future sales taxes, on FY 2013, another LE113 million deducted during the year for tax reviews with the local tax authorities for delayed settlements.
The additional 5% increase in corporate taxes by law with a noticeable EGP 70 million impact, and the hike in Deferred Taxes for contingent liabilities associated with taxes on dividends amounting for an additional EGP 308 million.
Costs increased year-on-year by EGP 866 million, or 12%, this was mainly due to a number of one-offs and a other natural operational costs. A delayed settlement one-off for license fees paid to the Regulator amounting for an additional EGP 201 million on the previous year 2013; and a one-off for some seasonal costs associated to advertisement campaigns, in the holy month of Ramadan and the company’s 160th Anniversary falling within the third quarter;
As for, other natural operational cost increases during the year were related to the annual cumulative increase, on 2013, in interconnection costs and volume call and transmission discounts extended to local operators of more than 190 million Egyptian Pounds; and the mounting up of salaries and wages following the 10% annual salary increase and the newly structured incentive rewards program, both of which came into effect as of the first quarter 2014, amounting for a difference of more than 280 million Egyptian Pounds on 2013.
Telecom Egypt Managing Director and Chief Executive Officer Mohamed Elnawawy, said:
“Our performance for the year was exceptional with a top-line growth of 9%, in line with management’s expectations and well-ahead of market estimates. The growth was across most of our business units operations, in particular our core retail line of business, redressing the balance between our wholesale and retail revenues.
The increasing demand for higher broadband traffic speeds and capacities, the growing data service strength and a leading 65.3% market share in fixed broadband, with more than 310 thousand net additions, has more than offset the decline in voice revenues, and created a new retail growth story for the company.
The Enterprise division was prudent in signing off and executing a number of agreements within the banking and government sectors, expanding regional operations with focus on SMEs and SOHOs and rolling out public Wi-Fi hotspots, all with the focus on the value chain and putting milestones nationwide to reinforce our ongoing efforts to serve the glorious, young and growing market by being its first total telecom operator.
Substantial progress was done on diverting the business once again to focus on our core retail line of business, while maintaining the natural growth on the wholesale business. The growth in wholesale is a reflection of management efforts through the years to diversify its revenue stream, capturing all it can from potential opportunities to serve all licensed operators in the Egyptian market and expand it footprint globally”.
Source: Arab Finance
