Telekom Slovenije published their 9M 2021 results, showing a 1.5% YoY increase in sales, a 5% YoY increase in EBITDA and net profit increase of EUR 8.5 m (31% YoY).
In the first nine months of 2021, Telekom Slovenije recorded sales in the amount of EUR 486m, representing a 1.5% YoY increase, mostly due to growth in revenues from international voice services and the sale of mobile merchandise. Revenues in the mobile segment of the end-user market were up 6.2% YoY to EUR 188m, primarily on account of higher revenues from mobile merchandise at Telekom Slovenije. Revenues from services are also declining at Telekom Slovenije due to the optimisation of subscribers who have an increasing number of services included in their monthly subscription fee. Revenues were also up relative to the same period last year at the subsidiary IPKO.
Revenues in the fixed segment of the end-user market were down 7.5% YoY, primarily due to lower sales of IT licences, which simultaneously reduces costs, and due to a decline in revenues from traditional voice telephony, as the result of the falling number of traditional connections and their replacement with mobile and IP telephony. Fixed telephony, as expected, reported a decline in units from 521k to 508k (-2.5% YTD). Revenues from financial services, energy, eHealth services and insurance are recorded in additional services, which were down 3.4% YoY to EUR 5.2m. Revenues from eHealth services were up in 2021, while revenues from other services were down.
Revenues on the wholesale market were up 7.3% YoY to EUR 116m, primarily due to higher revenues from international voice services. Other operating income and merchandise were up relative to the same period in 2020 due to higher revenues generated by subsidiaries on the market, as the result of less stringent measures in connection with the COVID19 pandemic. Despite slower tourist movement than in pre-pandemic, Q3 turned to be a solid quarter as operating revenues reached EUR 170.2m and were up 6% YoY.
Moving to expenses, OPEX decreased by EUR 4.4m, representing a decrease of 1.4% YoY. Highest impact on decreasing OPEX was achieved through decreasing cost of services by EUR 10.0m (-6% YoY). Labour costs rose 0.45% YoY, while the number of employees pretty much did not change and amounted to roughly 3.4k employees.
EBITDA increased 5% YoY, amounting EUR 174m. The increase in EBITDA was both due to an increase in sales and a decrease in OPEX. IPKO – Kosovo EBITDA amounted to EUR 30m, representing 17.24% of total EBITDA. Looking only at Q3, EBITDA reached EUR 60.3m, and was down 1% YoY.
Finally, net profit increased from EUR 27.4m to 35.9m in first nine months of 2021 (+31% YoY), as no negative effect from discontinued operations was evidenced in this period. As a reminder, in 9M 2020 the loss from discontinued operations in the comparable period comprises the operating results and effect of the sale of Planet TV, which was excluded from the Telekom Slovenije Group on 30 September 2020. Net profit was up also due to a slight improvement in net financial result of Group by EUR 0.5m. IPKO – Kosovo net income amounted to EUR 10m, representing 28% of total net profit of the Group.
An important factor to consider, solvency-wise, is debt that is relatively low at the level of the Group and Company. The financial liabilities of the Group and the Company as at 30 September 2021 relate to long-term syndicated loans and bilateral bank loans in the amount of EUR 340m, a short-term bank loan in the amount of EUR 26m, and lease liabilities in the amount of EUR 67m. The Group and Company
regularly repay their liabilities from financing. Long-term loans and borrowing increased from EUR 184m to 301m (63.6% YoY). Debt equity ratio stands at 70.8% at the end of 30 Sep 2021. Therefore, net financial debt increased from EUR 378m to 423m. Net debt/EBITDA ratio after taking into account 9M 2021 results stands at 1.8x, which is acceptable.
CAPEX-wise, Telekom Slovenije invested EUR 148m in Q3 2021, which represents an increase of 16.5% YoY. Most of the investment was used for the acquisition of a 5G radio frequency spectrum, which should increase expected revenues in upcoming years by an increase in margins.
Telekom Slovenije 9M 2021 Results (EUR m)