As HT’s competitor, A1 published their H1 2020 results, we are bringing you some key takes from them.
The parent company of HT’s largest competitors, Telekom Austria (A1) published their H1 2020 results and we are bringing you some key takes regarding their performance on the Croatian market. Note that Tele2 is the third largest provider of telephony services in Croatia and also one of HT’s competitors, however as their parent company finalized the divestment process on March 3, 2020, we are unable to obtain their quarterly results.
After the end of Q1 which went by mostly without any effects of the pandemic, in Q2 2020 self-isolation and physical distancing measures took place. In turn, this prompted the majority of people to remain at home, thus increasing their demand for data and other services related to home entertainment.
As a result, all telecom operators started to offer additional benefits to their customers, such as free TV content and special promotions on the fixed-line side as well as unlimited data tariffs, hardware discounts and free data packages on the mobile side. In the fixed-line market, digital channel push and additional benefits for customers such asfree TV content, hardware and discount promotions were all the reactions of A1 Croatia to Covid-19 challenges. In the mobile market, negative pandemic effects are mitigated with free data options, hardware discounts as well as high end tarrifs with double data in the prepaid segment.
In H1 2020 A1 Croatia recorded EUR 200.4m in revenues which represents a -3.9% YoY decline. The decrease was driven by lower service revenues and reduced equipment sales. Decrease in service revenues was caused by lower roaming and interconnection revenues as well as unfavourable FX impacts.
EBITDA is up 0.8% YoY, amounting to EUR 67.1m. Meanwhile EBITDA after leases amounted to EUR 59.6m which represents a 1.3% YoY increase. However, one should note that the growth seen is H1 comes from a solid performance in Q1 when the company recorded a 5.1% YoY growth in EBITDA. In Q2 lower costs and expenses due to reduced sales and marketing expenses as well as administration costs could not compensate for the decline in service revenues, which drove EBITDA down by 3.2% YoY.
Meanwhile CAPEX expenditures decreased by 40.3% YoY, amounting to EUR 27.7m. This doesn’t come as much of a surprise when considering that most works were suspended due to the lockdown and that the majority of investments concerning 5G have already been finished.
A1 Revenue & EBITDA (H1 2017-2020 EUR m)
