Good results of HT in the first quarter - revenue and profit growth

Hrvatski Telekom (Reuters: HT.ZA; Bloomberg: HTRA CZ), the strongest domestic telecom operator, has achieved revenue growth in the first three months of 2017, an increase of 8.7 percent compared to the same period last year and it amounts to HRK 1.818 million. Apart from the contributions of Crnogorski Telekom, revenue has increased in these key segments: mobile telecommunications, broadband access and television, wholesale and energy. Given the different dynamics of projects compared to the first quarter of 2016, there was less deviation in the realization of revenues from system solutions in the first quarter of this year. Without the contribution of Crnogorski Telekom, the revenue is 0.2 percent lower.

Profit before interest, taxes, depreciation and amortization (EBITDA) before exceptional items, is increased by 7.4 percent to HRK 674 million, compared to the previous year, with an EBITDA margin of 37.1 percent, which is 0.4 percentage points less than the same period last year. Excluding the contribution of Crnogorski Telekom, EBITDA before exceptional items increased by 0.2 percent and amounts to HRK 628 million, with an EBITDA margin of 37.6 percent.

Net profit in the first quarter increased by 9.5 percent and amounts to HRK 149 million. If the effect of Crnogorski Telekom is excluded, the net profit has increased by 6.8 percent and amounts to HRK 145 million.

Contribution of subsidiaries to HT's revenues, when it comes to Iskon in the first quarter of 2017, shows a growth of 3.2 percent to HRK 97 million, while Combis records a decline compared to the same period last year by 29.3 percent to HRK 82 million.

Hrvatski Telekom continues to invest heavily and capital investments are up by 16.6 percent, including the contribution of Crnogorski Telekom. Without this effect, the realization of capital investments in the first quarter increased by 9.7 percent compared to the same period last year and amounts to HRK 344 million, which is still twice as high as all the operators together.

Population coverage with the 4G indoor network is 71.8 percent and is 3.6 percentage points higher, while outdoor coverage reached 97.6 percent, which is an increase of 0.7 percentage points compared to the end of 2016. Coverage of the population with 4G download speeds of up to 225 Mbit/s is increased by an additional 2 percentage points to 52 percent compared to the end of 2016.

In mobile telephony, HT is very stable without too much oscillation when it comes to the number of customers, the market share and the average monthly consumption, both in the mobile and in the fixed segment. On the other hand, in fixed telephony, HT recorded a drop in fixed network connections by 6.5 percent, while at the same time the number of broadband connections and the IPTV provider continues to grow.

If one takes a look at the figures of Crnogorski Telekom, the drop in the company's total revenue by 8.1 percent, a drop in the number of customers in fixed telephony, broadband access, IPTV users can be seen, while only the number of mobile service users increased.

“In the first quarter of 2017, Hrvatski Telekom continues with the trend of increasing key financial indicators and is on a stable path of growth. In the next months, we will focus on further investment in our infrastructure. This way, we will ensure HT’s technological superiority and innovative services as the basic prerequisites for the best customer experience and premium position on the market“, says President of the Management Board of HT, Davor Tomašković.

According to him, together with Crnogorski Telekom, they are creating prerequisites for changes in this company, which is HT’s first step onto the regional market.

„In the first quarter, Crnogorski Telekom has already taken steps that are necessary for transformation of the company and for stabilization of financial indicators. We believe that the redesign of the organization and the action plan for realization of synergy effects in the areas of procurement, wholesale and market performance will substantially contribute to positive changes and to the fastest possible return of Crnogorski Telekom to the path of growth“, Tomašković concludes.