Hrvatski Telekom (Reuters: HT.ZA; Bloomberg: HTRA CZ), Croatia’s leading telecommunications provider, announces its unaudited consolidated results for the first six months of 2017.
Compared to H1 2016, total consolidated revenue has increased by 8.5% to HRK 3,691 million. Excluding Crnogorski Telekom’s contribution, revenue deviates by HRK 16 million, i.e. 0.5%, compared to H1 2016. Hrvatski Telekom continues achieving growth in mobile, broadband and TV, wholesale, and energy business revenue, whilst recording a decrease in system solution revenue (different dynamic in projects realisation compared to H1 2016) and fixed voice revenue.
EBITDA before exceptional items has increased by 8.9% to HRK 1,458 million compared to H1 2016. EBITDA margin is up 0.2 p.p. compared to H1 2016, reaching a 39.5% level. Excluding Crnogorski Telekom’s contribution, EBITDA before exceptional items has increased by 1.1% to HRK 1,353 million with EBITDA margin of 40%.
In relation to H1 2016, net profit is down by HRK 7 million, i.e. 1.7%, to HRK 410 million. Excluding Crnogorski Telekom’s contribution, the realised net profit has decreased by 4.9% to HRK 397 million as a result of higher depreciation and amortisation driven by increased infrastructure investments and financial expenses, mainly related to foreign exchange differences.
Continuation of Investments in Network Infrastructure, Innovative Services, and Company Transformation
Compared to the same period 2016, H1 2017 Capex realisation has increased by 27.7%, including Crnogorski Telekom’s contribution. Excluding the latter, Capex realisation has increased by 17.6% to HRK 759 million compared to H1 2016.
In fixed network, a total of 324 thousand Croatian households were provided with optical access by the end of H1 2017, which resulted in a 10% increase of optical access coverage compared to the end of 2016. Next generation access coverage is now available in 56% of Croatian households.
In mobile network, indoor 4G population coverage reached 75% at the end of H1 2017 (up by 7 p.p. compared to the end of 2016), whilst outdoor coverage reached 98% vs. 96,9% at the end of 2016. The 4G download speed increase from 225 Mbit/s to 262.5 Mbit/s reached population coverage of 45%, which is a 42 p.p. increase compared to the end of 2016.
Business IT Transformation project, the largest IT project in Croatia and one of the largest in the region, has been launched. It will last three years, and its value exceeds HRK 700 million. In addition to the restructuring of internal processes and the implementation of the most advanced IT systems, the project is supposed to raise the automation level and the digitalisation degree, thus ensuring the best customer experience.
Next generation TV platform has been implemented, providing the most advanced unique customer experience and the viewing of TV contents on any device, anywhere, and at any time. Service innovations have been introduced as well, allowing HT to be the first company in Croatia to enable eSIM and voice over super-fast LTE network. At the same time, the number of Magenta1 customers has been continuously rising and currently amounts to 77 thousand households, thus confirming the value of the concept of premium customer experience and benefits.
The integration of Crnogorski Telekom is under way. The new organisation was implemented in June, and measures for quick wins are being implemented in order to stabilise financial results in the short term and to prepare the company for long-term growth.
A four-year Share Buyback Programme was launched at the beginning of July. 2,500,000 shares are scheduled for acquisition, and the Programme has been allocated HRK 500 million.
As already announced, Hrvatski Telekom’s rights of temporary management of Optima Telekom have been extended for an additional three-year period, that is until July 2021. The process of the approved merger of H1 Telekom d.d. into OT-Optima Telekom d.d. is under way.
Commenting on the business results in H1 2017, Davor Tomašković, President of the Management Board of Hrvatski Telekom, pointed out: “I am satisfied with the results achieved in the first half of 2017. Excellent financial results allow us to invest and thus ensure HT’s technological superiority and the development of innovative services to the benefit of our customers, but also of the Croatian economy as a whole. Our new TV platform (IPTV and OTT) sets a new standard in the world of television services. We have provided voice over super-fast LTE network and super-fast data transmission during phone calls. Stream ON is a unique service on the Croatian and European market that provides customers with the opportunity to view entertainment contents without using the data included in their tariff package. In the following months, we will continue investing in network and in the digital transformation of our Company as preconditions for the best customer experience and a premium position on the market. In Crnogorski Telekom, we have jointly defined and started the implementation of measures for quick wins on the market and for the stabilisation of financial results in the short period. We have also been working on structural changes to prepare the company for long-term growth and to strengthen its position on the regional market as well.”