As a result of positive business developments Hrvatski Telekom has in 9M 2023 recorded 4.9% YoY revenue growth, which was driven by good performance across residential and business segment.
Despite inflationary and competitive pressures, we have managed to contain the increase of operating expenses to 4.4% YoY, which was supported by continued operating model transformation and efficiency initiatives. This, alongside with the strong commercial momentum has contributed to adjusted EBITDA AL growing by 3.9% YoY.
Net Profit reached EUR 96.3 million, reflecting solid EBITDA performance, supported by the non-operational drivers.
Total investments including spectrum amounted to EUR 281.3 million (+91.1% YoY), representing the market leading investments and HT’s persistent dedication to providing the platform for country’s digitalization and future business growth.
Strengthened network leadership
With market leading investments and development of infrastructure across Croatia, in urban and rural areas, HT has additionally strengthened its mobile and fixed network leadership.
In 2023 Hrvatski Telekom secured the largest share of legacy bands in the spectrum auction, won awards for the best and the fastest mobile network for the fifth year in a row, and continued to grow the already largest fiber-to-the-home (FTTH) network in Croatia by another 20.5% YoY, bringing HT a significant step closer towards fulfilling the goal of covering more than 1 million households with gigabit fiber speeds.
Deregulation of high-speed network services in competitive areas
On 27 July 2023 HAKOM adopted the final decisions on market analysis of wholesale fixed network access, deregulating HT’s fiber in 72 administrative units in urban areas of Croatia, which are by HAKOM deemed as competitive.
Deregulation of high-speed networks in competitive areas will enable equal market conditions for all market participants.
Continued operating model optimization
As part of ongoing operating model transformation Hrvatski Telekom has undertaken a series of initiatives in 2023 which will further enhance the efficiency of the business model.
By simplifying, digitalizing processes and modernizing our stacks, we have further improved experiences across all customer touchpoints in both residential and business segments. One of the notable strategic activities undertaken by Hrvatski Telekom is decision to fully merge Iskon Internet into Hrvatski Telekom, starting from January 2024, whereby it is foreseen that Iskon will continue to operate as a separate brand within Hrvatski Telekom. This strategic move follows the upcoming take back of the “Ericsson Nikola Tesla Servisi” technological unit for construction and maintenance of our network back to HT. Both changes will enable us to serve our customers even better, while also delivering higher efficiencies.
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 year 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 a 3.6% growth compared to the previous year.
In 9M 2023 Hrvatski Telekom, within the framework of ongoing Share Buyback Programme and through a successful Accelerated Book Building auction process that took place in September, purchased additional 690,032 Company shares on the Zagreb Stock Exchange.. Hrvatski Telekom paid an equivalent value of EUR 18.0 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.
Upgraded Outlook for 2023
Although the environment remains challenging, Hrvatski Telekom has improved FY 2023 Outlook. We expect a mid-single digit revenue and adjusted EBITDA increase, compared to 2022. Our CAPEX, excluding the investments made in spectrum this year, as well as our regional expansion outlook remain unchanged.
Commenting on the business results for 9M 2023, Konstantinos Nempis, CEO of Hrvatski Telekom, stated:
"In the first 9 months, we delivered strong results and maintained our growth momentum with an increase in revenue, EBITDA AL and net profit. This reflects our strong foundations, clear strategy and dedication to constantly improve our business operations and deliver the highest level of service.
We have further strengthened our network leadership by investing over EUR 280 million, which represent by far the largest market investments. Continuing to build our 5G and fiber networks brings us closer to our goal of covering over 1 million households with fiber infrastructure.
We are committed to further supporting Croatia’s digitalization with our investments in network and services, enabling the country to catch-up with the digital front runners in Europe.”