In Q1, the company observed an increase in sales of 20.8%, an increase in EBITDA of 12.5% and a net loss of 17.6m.

As DIGI Communications published their Q1 2019 report, we are bringing you key takes from it. According to the report, the company observed revenues of EUR 281.2m, representing an increase of 20.8% YoY. Of that, the Romanian market makes up for 64.2%, amounting to EUR 180.5m (+11%). Revenue growth in Romania was the result of both, the increase in telecommunication services prices starting with March 2019; the increase in cable TV and fixed internet and data RGUs and an increase in mobile telecommunication services ARPU.

Hungary represents DIGI’s second largest market, accounting for 19.6% of the total sales. In Q1, DIGI observed an increase of 47.5% in this market, amounting to EUR 55m. This increase was mainly due to our acquisition of Invitel and the increase in the prices of internet services starting with March 2019.

Spain represents DIGI’s third largest market, accounting for 14.4% of the total sales. In Q1, DIGI observed an increase of 50.6% in this market, amounting to EUR 40.5m.

In Q1, operating expenses amounted to EUR 263.8m, representing an increase of 30.3%. Of that, the Romanian market accounted for EUR 108.5m, representing an increase of 9.2%. As the Romanian Government issued the emergency ordinance GEO 114/2018 in December 2018, DIGI recorded a pro-rata basis accrual monitoring fee of 3.0% of telecommunications services revenues (€ 4.4m).

On the Hungarian market, the company observed an increase in operating expenses by 54.4%, amounting to EUR 45.4m. Such a high increase could be mainly attributed to the Invitel’s acquisitions.

Going further down the P&L, DIGI reported EBITDA of EUR 88.5m, representing an increase of 12.5%. Adjusted EBITDA amounted to EUR 90.7m. Note that the impact of adopting IFRS 16 on EBITDA was EUR 11.4m.

When observing the net financial result, DIGI recorded an increase in loss from EUR 11m in Q1 2018 to EUR 25.8m. The increase could be mostly attributed to a net foreign exchange loss of EUR 10.8m.

The higher operating expenses coupled with an increase in net financial loss lead to a net loss in Q1 of EUR 17.6m.

Performance (Q1 2019 vs Q1 2018) (RON m)