As a result of positive business developments Hrvatski Telekom in H1 2023 recorded 6.2% YoY revenue growth, which was driven by good performance across revenue categories in consumer and business segment.
Despite the double digit inflationary pressures on our cost base, we have managed to contain operating expenses increase to 6.7% YoY, supported by continued operating model transformation and efficiency initiatives. This, alongside with the strong commercial momentum has helped our adjusted EBITDA AL grow by 1.8% YoY.
Net profit of EUR 53,3 million approached pre-covid levels and was mainly supported by non-operational drivers and Montenegro.
Total investments including spectrum amounted to EUR 233.1 million (+126.4% YoY), representing the market leading investments and HT’s persistent dedication to provide the platform for country’s digitalization and future business growth.
Strengthened network leadership
By further investing in the development of infrastructure across Croatia, HT strengthened its network leadership.
Securing the largest share of legacy bands in the spectrum auction, in combination with the largest share of 5G spectrum won two years ago, HT ensures its customers will enjoy the best mobile network experience for years to come. At the same time, for the fifth year in a row, HT won the Ookla Speedtest Awards for the best and the fastest mobile network, recording the best ever score in Croatia.
In first six months of 2023 HT continued to expand its market leading fiber-to-the-home (FTTH) network, the only original gigabit technology, growing the largest FTTH network in Croatia by another 19% YoY – a step closer towards our ambition to cover more than 1 million households with fiber, investing and digitalizing across Croatia, in urban and rural areas.
Record-high employee and customer satisfaction
As the industry best employer HT continued systematically investing in its employees, result of which are record-high employee engagement and satisfaction scores, which also translated into HT maintaining the highest ever customer satisfaction levels.
Initiated take back of ENTS technological unit for construction and maintenance
Hrvatski Telekom has decided to take back the Ericsson Nikola Tesla Servisi d.o.o. (ENTS) technological unit for construction and maintenance of HT’s network which was initially outsourced from HT to ENTS in September 2014, and since then has been conducting construction and maintenance activities of HT’s electronic infrastructure.
The decision to have all strategic business segments within the company follows industry trends and will further accelerate HT’s operating model transformation, improve business flexibility, create prerequisites for further development of both fixed and mobile networks, while delivering even better and faster services to HT’s customers.
10-year contract for supply of electricity from renewable sources
Hrvatski Telekom d.d. and Liburana d.o.o., 100% owned by Professio Energia d.d., have concluded a Virtual Power Purchase Agreement (vPPA), which represents a significant milestone in HT’s energy strategy, thus confirming the Company’s commitment to responsible and proactive management on the way to a sustainable future. The electricity from renewable energy supply, in volume of 50 GWh per year, will be produced by wind powerplant that is to be built at the Mazin Gračac location.
The first ever corporate vPPA in Croatia, marks a great structural energy transition as an important step to ensure a substantial share of renewable energy for HT business operations, with it also directly contributing to meeting ambitious ESG goals.
Attractive capital return program for shareholders
Hrvatski Telekom’s capital allocation strategy clearly demonstrates the Company’s strong focus on shareholder returns and intention to return value to shareholders.
On 10 May 2023, the General Assembly confirmed the joint proposal by the Management Board and the Supervisory Board for the distribution of Net profit for 2022. The amount of EUR 1.10 per share represents a ratio of the dividend payment in relation to the realized Company profit of 93.9% and growth of 3.6% compared to the previous year.
In H1 2023 Hrvatski Telekom purchased additional 216,286 Company shares on the Zagreb Stock Exchange, within the framework of ongoing Share Buyback Programme. Hrvatski Telekom paid an equivalent value of EUR 5.4 million for the acquisition of the Company’s shares in the reporting period.
Management Board currently expects a minimum dividend of EUR 0.80 per share for the year 2023.
Unchanged outlook for 2023
In 2023, we are aiming for a low-single digit increase in revenues and adjusted EBITDA AL, and a mid-single digit decrease in CAPEX AL compared to 2022 (when excluding this year’s investments in spectrum). Our regional expansion outlook remains the same, as we continue to monitor and evaluate potential M&A activities.
Commenting on the business results for H1 2023, Konstantinos Nempis, CEO of Hrvatski Telekom, stated:
“In the first half of 2023, we continued with a strong commercial performance, delivering solid results across both consumer and business segment, with revenues and EBITDA continuing to grow, offsetting inflationary pressures on our operating expenses.
Knowing that our investments are essential for Croatia’s digitalization, we have more than doubled them compared to the same period last year, providing crucial support for the country’s progress. With the market leading investments, Hrvatski Telekom strengthened the foundations for our sustainable growth in the future as well as our network leadership in fixed and mobile. Increasing further the quality of our mobile network and gigabit 5G network coverage resulted with us winning industry standard awards for the best and fastest mobile network for the unprecedented fifth year in a row. By continuing to grow the largest fiber network, rolling out in cities and rural area we are bringing households and businesses across Croatia into gigabit era, remaining committed to our plans to cover more than 1 million Croatian households with fiber.
Digitalization has a truly transformative power in enabling economic growth and social development, and with the networks we are building being the backbone of digitalization, we continue creating the opportunities for the county’s progress.”