Results impacted by continued economic downturn coupled with EU regulation
- Revenue down 6.2%; EBITDA before exceptional items down 5.8% with stable margin at 39.2%
- Company’s internal transformation project finalised, new organisational structure as of 1 May
- Government announcement on exponential increase in annual frequency fees to significantly impact HT’s business operations
T-Hrvatski Telekom, Croatia’s leading telecommunications provider, announces unaudited results for the nine months to 30 September 2013.
Group Highlights
- Revenue down 8.0% to HRK 5,206 million or EUR 689 million (Jan-Sep 2012: HRK 5,660 million, EUR 753 million)
- Non voice revenue up 2.7%
- Fixed broadband ARPA up 1.8% to HRK 128
- Smartphone sales at 58.0% of total postpaid handsets sold
- EBITDA down 19.5% to HRK 2,148 million (EUR 284 million) and margin at 41.3% (Jan-Sep 2012: HRK 2,666 million or EUR 355 million, 47.1%)
- EBITDA before exceptional items down 17.0% to HRK 2,214 million (EUR 293 million), margin at 42.5% (Jan-Sep 2012: HRK 2,666 million or EUR 355 million, 47.1%)
- Net profit down 30.6% at HRK 964 million (EUR 128 million), margin at 18.5% (Jan-Sep 2012: HRK 1,388 million or EUR 185 million, 24.5%)
- Operating cash flow down 26.5% to HRK 1,427 million (EUR 189 million)
- Capex up 39.8% to HRK 857 million (EUR 113 million)
Residential Segment
- T-HT maintained its leading position in all three markets (mobile, fixed line and IP)
- Mobile subscribers down 2.1% (up 2.2% on Q2 2013)
- 521,453 broadband retail access lines, down 0.4% (flat on Q2 2013), and 361,748 TV customers, up 9.9% (up 2.4% on Q2 2013)
- Revenue down 3.6%, due mainly to lower voice revenue in mobile and fixed
- Contribution to EBITDA of HRK 2,039 million, down 4.8%
Business Segment
- Substantial customer base across all segments and products
- Mobile subscribers down 2.0% (flat on Q2 2013)
- 109,445 broadband retail access lines, up 4.3% (flat on Q2 2013) and 21,566 TV customers, up 7.9% (up 2.4% on Q2 2013)
- Revenue down 13.3%, due largely to lower voice revenues in mobile and fixed
- Contribution to EBITDA of HRK1,266 million, down 22.2%
Ivica Mudrinić, President of the Management Board (CEO), said: “During the third quarter of 2013 there was again no improvement in Croatia’s national economy and in the absence of any signs of recovery, a third credit ratings agency downgraded Croatia to sub-investment grade. On 1 July 2013, Croatia became a member of the EU and in light of the country’s fiscal challenges Croatia will enter the EU’s Excessive Deficit Procedure (EDP). EU accession and the related adoption of the EU regulatory framework has impacted the Group’s performance, with a greater fall in visitor revenue than had been expected. Consequently, revenue for the third quarter of 2013 fell 12% and EBITDA before exceptional items was 21.6% lower.
Whilst the imminent move into EDP may hasten the implementation of structural reforms in Croatia’s economy over the medium term, given the Group’s third quarter results we have amended our Outlook for the full year. We now expect an EBITDA before exceptional items margin of between 42% to 43%. However, the remainder of the Outlook is unchanged.
Despite the current economic challenges, the Group has nevertheless held on to its leading market position. We continue to focus on developing new products and innovative services in line with the business transformation strategy currently underway. The Group will endeavour to remain at the forefront of technological development to ensure we provide services that both anticipate and meet our customers ever evolving requirements, and maintain our position as the leading provider in our markets.“