Hrvatski Telekom Achieved Solid Growth in the First Quarter
Foto: Dražen Tomić - Tomich Productions
Hrvatski Telekom ended the first quarter of 2021 on a positive note with a strong commercial momentum. The company achieved solid growth with total consolidated net revenue, increasing by HRK 56 million or 3.2% compared to the same period last year.
The revenue increase was mainly driven by stronger mobile revenue (HRK 46 million or 6.0%) and fixed revenue returning to growth (HRK 12 million or 1.5%), with partial offset coming from timing of System solutions deals (HRK 3 million or -1.6%). EBITDA AL was also up HRK 25 million or 4.0% in 1Q21 as a result of an increase reported in both HT Group in Croatia (4.3%) and Crnogorski Telekom (0.2%). The EBITDA AL margin was 36.0%.
Net Profit contracted as improved EBITDA and lower taxation were insufficient to offset the increase in depreciation, which stems from high investments during previous years, with investments amounting to over HRK 9 billion just over the last five years. Despite the challenging environment Hrvatski Telekom continued to expand coverage of 5G network during the quarter. Additional 17 cities were covered with 5G network with a total coverage of 1.5m inhabitants, across 34 cities in Croatia.
In 1Q21, HT said it continued to focus on building its fiber-optic infrastructure and implementing the next generation fixed access network (NGA), while targeting an increase in the fiber-optic network footprint which represents the future of the fixed network and is the primary prerequisite for the country’s digitalization. FTTH coverage reached more than 370,000 households, 29% more than a year ago. Overall, fiber-based access network (FTTx) is now available to 531,000 households (19.3% YOY growth).
Croatian Regulatory Authority for Network Industries (HAKOM) announced that the public auction of the spectrum in 700 MHz, 3,6 GHz and 26 GHz frequency bands will be held in the period between May and July 2021. A public consultation on the Information memorandum on the public auction framework was launched on 2 April 2021. Spectrum award in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, and 2600 MHz frequency bands has been announced for 2022. Currently valid licences in these frequency bands expire in 4Q24.
The General Assembly confirmed a month ago that the joint proposal of the Management Board and the Supervisory Board for the distribution of net profit for 2020. The amount of HRK 641.9 million represents a ratio of the dividend payment in relation to the realized profit of the Company of 91.2%. During the quarter, HT purchased additional 189,924 Company shares on the Zagreb Stock Exchange, in line with its ongoing Share Buyback Program. The company paid-out an equivalent value of HRK 35.3 million for the acquisition of the shares in the reporting quarter.
Although the environment remains uncertain, HT confirms their 2021 outlook (including Optima Telekom until end-June 2021). They expect a mid-single digit decrease in revenue, and a low-single digit increase in EBITDA AL compared to 2020. CAPEX expectations are at around HRK 1.6 billion, down from the 2020 total of HRK 1.82 billion. In terms of regional expansion, the company will continue to monitor and evaluate potential acquisition opportunities.
"Doing business in 1Q21 remained under the impact of the COVID-19 pandemic extension. Still, despite the challenging macroeconomic environment, Hrvatski Telekom maintained its strategic focus, continuing with the investments in the infrastructure and the country’s digitalization," said Konstantinos Nempis, CEO of Hrvatski Telekom.