Hrvatski Telekom closed the Q1 2022 on a positive note with a good commercial performance, continuing to grow in core telco and increasing profitability, while maintaining the strong investment plan ensuring the continuation of positive trends and solid commercial momentum.
In Q1 2022, organic revenues contracted by 0.7% YoY as the growth of the core telco revenues was not sufficient to fully offset contraction of System Solutions where we continue to a focus on more profitable projects.
Organic adjusted EBITDA AL increased by 5.1% YoY. This is the sixth consecutive quarter of adjusted EBITDA AL growth demonstrating continuation of positive commercial momentum and positive impact of operating model transformation measures.
Organic net profit amounted to HRK 175 million, up 237.4% YoY, supported by improved operating performance and lower depreciation. Organic investments amounted to HRK 356 million, up 7% compared to the same period of last year.
Strengthened network and CX leadership through continued investments in fiber and 5G
Hrvatski Telekom remains committed to its investment plans in network quality, 5G development and fiber infrastructure roll-out, which are the key digitization and development drivers for the country. In line with this Hrvatski Telekom continued to focus on building its fiber-optic infrastructure across Croatia, and we expanded further the FTTH coverage by a notable 31% YoY.
Our continuous investments and implementation of 5G network continued in Q1, with us focusing on maximizing the positive effect in the traffic busiest areas through the implementation of the 5G layer on the 3.5 GHz spectrum.
Our network experience and our strong customer-focus have at the same time resulted with improved experiences across all customer touchpoints, with our customer experience metrics reaching once again the highest levels ever in HT’s history.
The highest ever SBB in corporate history in Q1 2022
Our capital allocation strategy clearly demonstrates our strong focus on shareholder returns and our intention to return value to our shareholders.
On 25 April 2022, the General Assembly confirmed the joint proposal of the Management Board and the Supervisory Board for the distribution of net profit for 2021. The amount of HRK 638 million represents a ratio of the dividend payment in relation to the realized profit of the Company of 95.8%.
As we saw an opportunity to create additional value for our shareholders, in Q1 2022 we executed the highest ever share buyback in our corporate history. During the quarter, Hrvatski Telekom purchased additional 943,423 Company shares on the Zagreb Stock Exchange, within its ongoing Share Buyback Programme. Hrvatski Telekom paid an equivalent value of HRK 173.8 million for the acquisition of the Company’s shares in the reporting quarter, which represents growth of 372% YoY. The total number of the acquired Company shares as at 31 March 2022 amounted to 1,270,261, representing 1.59% of the Company’s issued share capital.
Looking into 2022, the beginning of the year has brought up new challenges across Europe. While monitoring the developments and possible implications in our business and the country overall, we remain focused on our strategy and key objectives based on which we have structured our plans for 2022. In 2022, we are aiming for stable revenues, around a mid-single digit increase in EBITDA AL, and a mid-single digit decrease in CAPEX AL compared to 2021. Our regional expansion outlook remains the same as we continue to monitor and evaluate potential M&A activities.
Commenting on the business results for Q1 2022, Konstantinos Nempis, CEO of Hrvatski Telekom, stated: “Our strong performance, with us growing in core business, EBITDA and profitability, while at the same time keeping our investments at high levels and improving customer experiences across all touchpoints, confirms that our strategy is the right one.
It is also clear that the year 2022 has brought up new challenges across the entire world. While monitoring the developments and possible implications on our business and the country overall, we remain focused on our strategy and key objectives, but also ready to adjust if needed, securing the foundations for our company’s success in the years to come.
As the leading digital infrastructure investor in the country we will continue investing in the country’s future economic and social development, hopeful that the investment friendly framework allows our investments in digitalization to reach their full potential. From our side we will do everything in our power to make these opportunities a reality for all – our customers, employees, partners, shareholders.”