During 9M 2023, Telekom Slovenije recorded revenue growth of 7% YoY, an EBITDA increase of 4%, and a net income of EUR 39.9m, a 2% increase YoY.
Starting off with the revenue, it amounted to EUR 518.8m, an increase of 7% YoY. Telekom Slovenije notes that revenues were up in the mobile segment of the end-user market on account of growth in the number of subscribers in both Slovenia and Kosovo, where the number of prepaid users is also growing, and due to higher revenues from mobile merchandise and revenues on the wholesale market. Furthermore, the Company is also recording an increase in the areas of financial services, eHealth, insurance services, and IT services and merchandise. Finally, higher revenues were also achieved on the market by all subsidiaries.
Telekom Slovenije further notes that they recognized an impairment assessment of the infrastructure damaged in the August floods. On the op. profitability level, the recognized net effect is estimated at EUR 5.3m. Furthermore, the estimated impairment of the present value of property, plant, and equipment amounted to EUR 8.1m and has been recognized in other op. expenses. At the same time, the Company notes that this cost should be taken together with estimated other op. revenues, which amounted to EUR 2.8m.
Total expenses amounted to EUR 467.7m, noting a 6% increase YoY. The largest increase came from the aforementioned other op. expenses, which increased by 3.4x, or EUR 10.5m to EUR 13.5m. Costs of services increased by 5% YoY to EUR 159.2m, in line with the higher revenues in the wholesale market. Meanwhile, the cost of material and energy increased by 40% YoY to EUR 6.5m, and finally, labour costs increased by 2% YoY to EUR 84.6m.
As such, the EBITDA amounted to EUR 181.8m, increasing by 4% YoY. Furthermore, the EBITDA margin amounted to 35%, a 0.96 p.p. decline YoY. In terms of the net financial result, it declined by 125% YoY, or EUR 6.8m to EUR 12.2m. This came as a result of slightly lower financial income (EUR 966k, -12% YoY), while financial expenses increased by more than 2x, to EUR 13.2m. Due to these developments, the net income amounted to EUR 39.9m, increasing by 2% YoY. As such, the net income margin declined by 0.34 p.p. to 7.7%.
Telekom Slovenije key financials (9M 2023 vs. 9M 2022, EURm)
Source: Telekom Slovenije, InterCapital Research
Telekom Slovenije also provided an assessment of operations for 2023. They estimate that the Company will exceed the originally planned op. revenues and EBITDA. As such, they estimate the op. revenues at EUR 699m (previously: EUR 680.8m), EBITDA at EUR 226m (previously: EUR 206.2m), and a net profit of EUR 38m (previously: EUR 20.1m).
Furthermore, Telekom Slovenije also commented on its strategic goals for the period 2024-2028. In 2024, they expect the op. revenue at EUR 717.4m, an EBITDA of EUR 233.6m, and a net income of EUR 43.2m. Investments are expected at EUR 235.7m. By 2028, they expect the EBITDA at EUR 280m, and a net income of EUR 83m. Investments in the 2024-2028 period are expected at EUR 951m. In terms of the dividends policy, they expect the payment of dividends in the amount of 30-50% of the Group’s net profit, taking into account the current financial situation and investment needs of the Group.
