Consolidated revenue surged by 28% year-over-year, hitting EGP 56.7 billion. This growth was led by a substantial 18% year-over-year growth in data, with infrastructure, IDD, and cable projects also contributing significantly with growth rates of 27%, 76%, and 64%, respectively. The customer base for fixed voice and broadband expanded by 8% and 9% year-over-year, respectively, while the mobile customer base remained stable. EBITDA saw a remarkable 30% year-over-year increase, achieving a robust 40% margin at EGP 22.7 billion, slightly surpassing management's expectations.
This upswing was primarily fueled by strong operational results and savings from a new national roaming agreement, which mitigated escalating costs due to inflation. Operating profit climbed by 28% year-over-year, driven by improved operating performance, counterbalancing a 27% increase in direct costs. Net profit rose by 25% year-over-year to EGP 11.5 billion. In-service capital expenditure amounted to EGP 20.3 billion, representing 36% of revenue, while cash capital expenditure, including license fees, reached EGP 26.4 billion.
Notably, the cash CapEx encompasses around EGP 2 billion for NUCA, Hayat Karima, and digitization projects, financed by the government. Net operating cash flow stood at EGP 17.0 billion. Meanwhile, free cash flow to the firm (FCFF) reached a negative EGP 3.6 billion, primarily due to expedited vendor payments to meet CapEx requirements and hedge against anticipated foreign exchange volatility. The net debt/EBITDA ratio increased to 1.7x from 1.4x in FY 2022 due to currency devaluation, as 66% of the debt is denominated in foreign currency. The board of directors proposed a dividend distribution of EGP 1.5 per share.
Mohamed Nasr, Managing Director and Chief Executive Officer, commented:
"2023 was a very strong year for Telecom Egypt. Consolidated revenue in Q4 amounted to EGP 14.7bn, up 23% YoY, while FY 2023 amounted to EGP 56.7bn, up 28% YoY. Although market headwinds continued to challenge us, we remained focused on our strategy and forged ahead with our investment plans to support our growth opportunities, strengthen our partnerships and improve our operations—all of which contributed to the great results you see today.
Our customer base continues to grow, marking an 8% and 9% YoY increment for fixed voice and broadband, respectively; meanwhile, the mobile customer base was largely flat at the end of FY 2023, but began to grow again at the start of 2024.
EBITDA margin surpassed our guidance, thanks to exceptional operational results and major cost savings from the national roaming agreement, which came into effect at the start of 2023.
We continued to strategically procure settle our CapEX requirements upfront, as such FCFF was strained, amounting to a negative EGP 3.6bn, mainly due to the increase in vendor payments as a tool to hedge against expected FX fluctuations in 2024, as well as other unforeseeable risks given the current volatile situation in the region.
As we enter 2024, in addition to the price up that already came into effect starting January—which I believe will greatly support our financial position—we remain committed to driving business success with customer-centric innovation strategies. Our focus will be on improving existing services and product offerings, as well as adding new products and services, such as expanding our submarine cable footprint and 5G services. I’m confident that our action plan will unlock Telecom Egypt's full potential and ensure that it is a consistently high-performing business that delivers increased shareholder value. On that note, on the back of these fantastic results, we distributed EGP 1.5 per share.”
