Financial Results for Sudatel Telecom Group (STG) reflect positive results in all its operating companies despite the war in Sudan.
Sudatel Telecom Group (STG) announced a consolidated revenue of $400 Million for the Fiscal year (FY) 2023; a slight decline of 5%, from prior year. The breakout of war in April 2023 in Sudan, affected the Group’s largest operation “Sudani,” where services were provided free-of-charge, for nearly 10 weeks in 2023 (approximately 20% of the year). EBITDA margin for the Group reached 42%. The Group’s Net Income has reached $19.9m compared with $56.9m even after the exceptional pressure on costs.
This is the first time since 2017 that all Sudatel’s operating companies have generated positive Net Income, despite exceptional pressure on costs, mainly from the situation in Sudan.
The demand for DATA services has continued to grow at a strong pace across all Sudatel subsidiaries.
The management of the Sudan operation continued to control costs, while committing the investments necessary to develop network capabilities for future growth. This was positively secured with due regard to cash generation, without recourse to external funding. The management’s focus has been to enhance the EBITDA margins in the West African operations, in order to counterbalance the sudden financial impact in Sudan.
“Sudani,” lead STG’s revenue with revenues of $271.9m, compared with $285.8m in FY2022. FY2023 Q1/2023 revenue had shown an exceptional growth, until the country’s crisis disrupted this strong trajectory. Sudani achieved an EBITDA margin of 46%; quite remarkable when considering the exceptional cost increases in Sudan. This was achieved despite the significant depreciation of the Sudanese Pound (SDG); as local currency revenue grew by 10% from SDG157.6billion to SDG173.3billion.
Provision for substantial damage of $26.2m sustained, led to a net income decline from $82.2m (SDG45.4bn) to $28.3m (SDG17.2bn).
Indeed, the crisis has displaced millions of Sudanese from the Khartoum area, while it highlighted the essential nature of telecom services, as a basic and critical utility. The latest signs of recovery of economic activity later in the year are reflected as well on demand in telecom services.
West African operation “Expresso Senegal” remained stable in revenue terms at $64m. However, the extra effort in cost control coupled with telecom licence extension and concessions on taxation have contributed to the operation turning a positive net income of $138k; the first in 5 years.
“Chinguitel,” which operates in Mauritania showed a 4% decline in revenue Year-On-Year in USD terms; in MRU, the revenue declined by 8%. Nonetheless, the Net Income was positive at $1.9 m for FY2023, compared with a profit of $5.8m in FY2022.
STG’s total mobile customer base remains stable, except for some regulatory demands in Mauritania from all mobile operators to verify identities resulting in some customers to be disconnected. The growth in data consumption continues at a strong pace across the subsidiaries.
These results demonstrate the effectiveness of the management in dealing with the most difficult circumstances and its ability to maintain business continuity. The company provided access to the network for voice and data within Sudan, even though the billing systems were disrupted during May/June 2023. These interruptions were countered in collaboration with the company’s key vendors, by erection of an additional data centre, as well as the enhancement of the network (all in the safe regions); where the population is now concentrated.
In essence, the disruptions resulting from the war have been mitigated, in great part, through recovery initiatives in accordance with the transformation strategy of the business.The persistence to provide continuous service during excruciating circumstances has shone light on STG’s creed that “Telecom as a basic life necessity,” is a responsibility that the company strives to offer its customers, by all attainable means.
