Financial highlights Q2 2019:
Q2 2018 interim statement has been restated according to changes made to treatment of TV rights.
- Síminn‘s revenue amounted to ISK 7,115 million in the second quarter (Q2) of 2019, compared to ISK 7,153 million in the same period 2018. A decrease by ISK 38 million or 0.5%.
- EBITDA amounted to ISK 2,602 million in Q2 2019, compared to ISK 2,386 million in the same period of 2018, up by ISK 216 million or 9.1%. The EBITDA ratio was 36.6% in Q2 2019, compared to 33.4% in the same period of 2018. Considering changes due to IFRS 16, EBITDA at Q2 2018 amounted to ISK 2,581 million and EBITDA ratio was 36.1%.
- Profit in Q2 2019 amounted to ISK 798 million, compared to ISK 853 million in the same period of 2018.
- Cash generated by operation amounted to ISK 2,087 million in Q2 2019, compared to ISK 2,438 million in the same period of 2018. Net cash from operating activities amounted to ISK 1,735 million in Q2 2019, compared to ISK 2,088 million in the same period 2018.
- Interest bearing debt amounted to ISK 16.5 billion at the end of Q2 of 2019, compared to ISK 17.2 billion at the end of 2018. Net interest-bearing debt amounted to 16.0 billion ISK at the end of Q2 2019 down by ISK 22 million compared to year end 2018.
- Net financial expenses amounted to ISK 269 million in Q2 2019, compared to ISK 190 million in the same period of 2018. Financial expenses amounted to ISK 301 million, financial income ISK 46 million, and foreign exchange loss ISK 14 million.
- Síminn's equity ratio was 56.3% at the end of Q2 2019 and equity was 36.3 billion.
Orri Hauksson, CEO:
„We are satisfied with the Q2 results and the stable operations it reflects. EBITDA is growing between YoY quarters despite reduction in wholesale- and roaming revenue. EBITDA increases significantly from Q1 this year which was a quarter not in line with our expectations. Collective bargaining agreements were signed in Q2 and have effect from the beginning of the quarter. Wage cost is however lower than Q2 2018 as a result of reduction in FTE’s effective from Q1 this year.
Mobile handset sales decline YoY. This is a global trend since consumers choose to stick with their handsets for longer. Margin from handset sales is low and the sales reduction has little effect on results. Sales of mobile subscriptions is far more important revenue than handset sales. Total mobile revenue continues to inch downwards. The decline is for the most parts related to wholesale- and roaming revenue whereas the core consumer revenues are experiencing a turnaround. Subscriptions are growing and Þrenna continues to be a success. The signs in the mobile market are positive despite competitive environment where the fiercest competition remains in the corporate market.
IT revenues are growing between Q2 19 and Q2 18 despite the slowdown in the economy. Demand for IT products and services has not picked up this year and competition for projects is fierce. Results in Q2 are therefore encouraging but are not indicative of performance during the next quarters. Simultaneously to ongoing projects Sensa is working on number of new initiatives to build the foundation for even stronger company.
Infrastructure investments have been conducted at a fast and steady pace this year. At the end of the year Míla will have laid fiber optic cables towards around 80 thousand homes in Iceland. This is heavy capital expenditure while it being undertaken. However, it lasts for decades ones it has been done. As an example, the Síminn Group laid its first fiber in 1986, which is still in use.
TV revenues are performing well. Price changes in August 2018 increase TV and fixed line telephony revenue but reduce internet revenue. This effects YoY comparison. The focus is on the success of Premium TV services and the Home Package and in both cases, we have seen growth measured in thousands YoY. Now when the English Premier League (EPL) is a part of the Premium TV service offering our hope is for even greater success. In addition, EPL is sold standalone at reasonable prices and available over all types of TV distribution channels. Sales of the EPL have exceeded our expectations for the first weeks of the service and has proved to be a good fit with other product offerings of Síminn. Prices are kept reasonable to prevent illegal streaming of games. We will continue to offer our services to more homes than the around third of Icelandic homes that currently subscribe to the service at lower prices than before.
We are positive towards the upcoming winter. “
Investor meeting 28 August 2019
An investor presentation will be held on Wednesday 28 August 2019 at 8:30 am at Síminn’s headquarters in Ármúli 25, Reykjavík.
During the meeting, Orri Hauksson CEO and Óskar Hauksson CFO will present the financial results. The meeting will be held in Icelandic.
Documents and a recording of the meeting will be available after the meeting on the company’s investor relations website:
www.siminn.is/forsida/siminn/fjarfestar/fjarhagsupplysingar/uppgjor
and in Nasdaq’s Iceland company news.
The meeting will be webcasted on: https://livestream.com/accounts/11153656/events/8776671/player
Further information
Orri Hauksson, CEO, tel. 354 550 6003 (orri@siminn.is)
Óskar Hauksson, CFO, tel. 354 550 6003 (oskarh@siminn.is)
Attachments
