Telecom Egypt (TE) recorded a 111.2% increase in annual net profits to EGP 2.99bn, according to its financial statement, published Monday.
The net consolidated profits increased to EGP 2.99bn compared to the EGP 1.42bn recorded at the end of 2014, while posting unconsolidated profits of EGP 1.3bn compared to EGP 1.5bn the previous year.
On the quarterly level, the company achieved net profits of EGP 863m at the end of the fourth quarter of 2015, compared to EGP 393.2m recorded at the end of the same period in 2014.
According to Ahmed Ramadan, a telecommunication analyst at Mubasher Research, the surge in profits at the end of 2015 was mainly due to the enforcement of the new income tax law on the company.
The Egyptian government issued a decree in March 2015, decreasing the income tax imposed on companies to 22.5% from 25%.
Ramadan added that the company did not post an increase in revenues on the operational level. However, it recorded revenues from the internet services offered through TE Data, one of its subsidiaries.
Ramadan noted that further efforts must be exerted on the company’s part to allow it to achieve more profits on the operational level, either by getting benefits from TE Data or by trying to enter the mobile market.
Hesham El-Shebeeny, the chairman of the research sector at Arabeya Online, concurred that the increase in profits resulted from the decrease of the applied income tax. El-Shebeeny believes that the company’s profits have stabilised, noting that the income tax is not expected to decrease again.
“2016 will not see a similar increase in profits for Telecom Egypt, except through launching new massive projects which can lead to increasing revenues,” he noted.
TE recorded EGP 2.14bn in net profits during the first nine months of 2015, against EGP 1.03bn in the same period of the previous year.