During 2023, A1 Croatia recorded revenue growth of 11.7% YoY, and EBITDA growth of 17.4% YoY. No net income data is available on the A1 Croatia basis. As Telecoms were able to increase their prices due to inflation indexation, A1 Croatia increased their prices by 8.5% in July 2023, which supported Q4 2023 results. Therefore, in Q4, total revenue of A1 Croatia increased by 12.3% YoY, while the EBITDA grew by 43.3% YoY.
A couple of days ago, one of the main competitors to Hrvatski Telekom, A1 Croatia published its results as part of the A1 Group FY 2023 results. While not a lot of details are available on the A1 Croatia level, what is available will be detailed in this overview.
Starting off with the total revenue, in 2023 it amounted to EUR 525m, growing by 11.6% YoY, while in Q4 this growth amounted to 12.1% YoY, totaling EUR 137m. On the Group level, A1 recorded total revenue of EUR 5.25bn, growing by 4.9% YoY, while in Q4 they recorded revenue of EUR 1.37bn, increasing by 2.3% YoY. As such, we can see that the Croatian market is growing faster than the Group level, contributing more to the overall growth. In terms of the services revenue, they amounted to EUR 425m in 2023, growing by 8.7% YoY, and EUR 108m in Q4 2023, increasing by 11% YoY.
A1 notes that in Croatia, the market dynamics remained roughly unchanged during Q4 2023, with results continuing to develop strongly. In the mobile business, A1 Croatia was focused on promoting its new product portfolio launched earlier in 2023 with integrated new business services, gaining customers with attractive handset offers, increasing ARPU, and protecting the customer base from aggressive actions by competitors through customized and personalized offers.
Meanwhile, in the fixed-line business, A1 Croatia leveraged its increased broadband coverage after significant fiber investments starting in the previous reporting year. A1 further notes that attractive TV and advanced broadband bundles played an important role in the successful customer acquisition throughout the year. Furthermore, intensive cost transformation programs are in place to help overcome the effects of inflationary pressures in Croatia.
A1 was also able to increase both the number of mobile subscriber base as well as the total number of RGUs. In the latter one, significant growth was recorded in the advanced broadband segment. A1 further notes that value-protecting measures were implemented in July 2023, which supported Q4 2023 results. Besides the growth in service revenues, equipment revenues also rose on the base of the increased share of flagship phone sales.
While no details on the cost side are available, A1 noted that core OPEX was reduced slightly compared to Q4 2022, and this was achieved despite the rising total workforce costs and higher electricity costs. Equipment margin also decreased during the same period.
Taking it all together, this led to an EBITDA of EUR 189m during 2023, and EUR 43m during Q4, growing by 17.4% and 43.3% YoY, respectively. This also meant that the EBITDA margin amounted to 36% in 2023, and 31.5% in Q4 2023, growing by 1.8 p.p. and 7 p.p. YoY, respectively.
While no details for the net income are provided on A1 Croatia basis, on the Group level, the net income amounted to EUR 646m in 2023, and EUR 145m in Q4, increasing by 1.7% and 9.8% YoY, respectively. This would also mean that the net income margin amounted to 17.3% in 2023, decreasing by 0.1 p.p. YoY, and 10.6% in Q4, growing by 0.8 p.p. YoY.
A1 Croatia Revenue, EBITDA comparison (2023 vs. 2022, EURm)
Source: A1 Group, InterCapital Research
In terms of total CAPEX, on the Group level, it amounted to EUR 1.09bn during 2023, growing by 15.7% YoY. Investments in the frequency spectrum amounted to a total of EUR 133m, of which EUR 111m (incl. interest) were into Croatia, and EUR 22m into Bulgaria. Excl. spectrum, CAPEX grew slightly by 2.6% YoY to EUR 959.6m, with increases in Austria, Bulgaria, Croatia, and Serbia, while investments decreased in Belarus and Slovenia.
