Full year 2018

  • Sale in FY 2018 amounted to ISK 28,540 million, compared to ISK 28,433 million in FY 2017. Adjusted for sold operations revenues are up by ISK 357 million YoY (1.3% YoY).
  • EBITDA amounted to ISK 8,752 million in FY 2018, compared to ISK 8,607 million in FY 2017, up by ISK 145 million (1.7% YoY).  The EBITDA ratio was 30.7% in 2018, compared to 30.3% in 2017.
  • Profit in FY 2018 amounted to ISK 282 million, compared to ISK 3,076 million in FY 2017. Decrease in profit is due to impairment loss of goodwill at Míla which amounted to ISK 2,990 million. If goodwill would not have been impaired the profit would have increased by around ISK 200 million YoY. 


Q4 2018

  • Síminn‘s revenue amounted to ISK 7,544 million in the fourth quarter (Q4) of 2018, compared to ISK 7,500 million in the same period 2017. Adjusted for sold operations revenues are up by ISK 85 million YoY (1,1% YoY).
  • EBITDA amounted to ISK 1,908 million in Q4 2018, compared to ISK 1,930 million in the same period of 2017, down by ISK 22 million (-1.1% YoY). The EBITDA ratio was 25.3% in Q4 2018, compared to 25.7% in the same period of 2017.
  • During the year ended 31 December 2018, the goodwill in relation to the operation of Míla ehf. was impaired by 2,990 million following adverse movements in the discount rate and the management decision to increase the speed of the fiber project rollout. The impairment loss is recognised in the consolidated income statement as separate line item within operating profit.
  • Loss in Q4 2018 amounted to ISK 2,436 million, compared to profit of ISK 607 million in the same period of 2017. Without the impairment loss the profit for Q4 2018 would have been ISK 554 million.
  • Cash generated by operation amounted to ISK 1,833 million in Q4 2018, compared to ISK 2,065 million in the same period of 2017. Net cash from operating activities amounted to ISK 1,684 million in Q4 2018, compared to ISK 1,285 million in the same period 2017.
  • Interest bearing debt amounted to ISK 17.2 billion at the end of 2018, compared to ISK 18.4 billion at the end of 2017. Net interest-bearing debt amounted to 16.0 billion ISK at the end of 2018, compared to ISK 17.7 billion at the end of 2017.
  • Net financial expenses amounted to ISK 205 million in Q4 2018, compared to ISK 343 million in the same period of 2017, down by 40% YoY. Financial expenses amounted to ISK 240 million, financial income ISK 60 million, and foreign exchange loss ISK 25 million.
  • Síminn’s equity ratio was 59.8% at the end of 2018 and equity was ISK 35.2 billion.

Orri Hauksson, CEO:

“2018 was a strong year for Síminn Group, both financially and operationally. Total revenue increased slightly, but unlike previous years there was a significant growth in retail revenue due to a growing customer base. Revenues from roaming and wholesale decreased as was expected. Operating expenses were kept under control, although general prices have risen somewhat, and the ISK currency depreciated in the latter half of the year. The result is that EBITDA grew year-on-year, as the Group aims for each year and the EBITDA ratio of the Group became the highest since 2006.

Síminn's media operations enjoyed an especially favorable run and customers with Síminn Premium TV exceeded 40,000 at the end of the year. The number of mobile customers has also increased and for the first time since competition began in the mobile market in Iceland in 1998, more mobile consumers are being transferred to Síminn from other service providers than those who leave us. Internet and other data services also continued to grow during the year at Síminn and at Míla's wholesale. The number of households with active fiber-optic connections from Síminn now reaches 20 thousand, out of the 80 thousand homes that the Group serves. In the second half of next year, more homes will be connected to the Group's fiber-optic network than the copper access network.

Míla enjoyed a great year with its highest EBITDA ever, both measured in ISK and as a percentage of revenue. To some extent, this success comes from individual projects in 2018, which will not be repeated this year. The main reason, however, are solid core operations. Míla's goodwill was impaired by almost three billion by the end of 2018 following an adverse movement in interest rates and acceleration of investments in the fiber-optic project due to external collaboration. The impairment loss sets its mark on the income statement and the balance sheet. Thus, various ratios will change, and the balance sheet decreases by the amount of the impairment loss. On the other hand, the impairment loss does not affect cash flow, tax payments or investment capacity and dividend payments.

Another and more significant change will be reflected in the company's balance sheet and income statement in 2019. The IFRS 16 Accounting Standard will now be incorporated, which means that the Group's lease agreements are recognized as assets and liabilities on the balance sheet and will be amortized annually in accordance with the lifetime of the contracts. Furthermore, the TV content rights will also largely be capitalized and amortized annually during the lifetime of the contracts. The overall effect on the Group’ statements is that EBITDA margin and investments will increase, and the balance sheet will be larger. Just as with the impairment loss, these changes have no cash flow effect, nor does its economic reality change in any way.

Sensa had a good fourth quarter 2018. In total, the company earned as much revenue in 2018 as in the previous year, except for the company's operations in Denmark, which were mostly closed by the end of 2017. At the same time, the technical equipment and hosting environment of the Group was upgraded and moved in a first-class hosting facility in Verne Global data center. These projects are reflected in investments and operating expenses of the year. Already, a visible result of this change are more diverse service offerings and lower infrastructure cost. The outlook for the year is stable and offers various opportunities for increasing market share.

There are various risk factors in the operation of Síminn Group. The competition in the Icelandic market for both telecommunications and information technology is extremely fierce. Prices in the mobile market remain under great pressure and Iceland now has some of the lowest mobile prices in the Western world. Furthermore, disputes in the labor market will potentially make their mark in the coming weeks and months, affecting the operating environment of the Síminn group. The Group is however well prepared for conflicts and incidents in the negotiation between trade unions and employers. Possible strikes will cause greater harm to other sectors but are of course equally undesirable to Síminn as others, especially if they persist for a long period of time. Síminn's goal for the year is that wage costs remain similar between years. The number of full-time employee positions at Síminn has decreased in recent years, mainly due to an emphasis on automation and more efficient processes in recent quarters. Síminn will continue down the same path this year. For example, all products and services offered by Síminn will be offered to customers in self-service next year. Another example of successful re-engineering of processes that has been completed is digitizing our TV broadcasting environment and moving operations to the cloud. Customers make great demands for the stability of such services, but after the change, the systems that handle the service need far less human management than before, and the likelihood of an operational failure has decreased significantly.

The English Premier League rights give Síminn the opportunity to expand its product portfolio from next August, creating new and profitable revenue streams over the coming years. The impact of this change on this year results will be insignificant, but it will shape our future business immediately this summer. Overall, Síminn and its subsidiaries positions are strong in times of change and increased economic uncertainty."

Further information

Orri Hauksson, CEO, tel. 354 550 6003 (orri@siminn.is)

Óskar Hauksson, CFO, tel. 354 550 6003 (oskarh@siminn.is)