In 2019, the Group recorded a decrease in sales of 6% YoY, an increase in EBITDA of 11% and a decrease in net profit of 96%.
Telekom Slovenije published their Annual report on Ljubljana Stock Exchange. According to the report the Group recorded a sales decrease of 6% YoY, amounting to EUR 675.4m. If we were to exclude the revenues generated by Blicnet (which was sold in 2018), the sales were down by 4%. Meanwhile, operating revenues amounted EUR 681.7m, which is a decrease of 7% YoY. The proportion of new revenue sources accounted for by eHealth, energy and financial and insurance services was up relative to 2018. Also, revenues of GVO and Planet TV generated on the market outside of the Group recorded an increase. However, those were not enough to offset in full lower revenues from mobile subscribers, who are migrating to new, more affordable packages, and the expected drop in revenues from traditional fixed voice telephony services, which are being replaced by mobile and IP telephony. Lower revenues on the wholesale market are the result of lower revenues from international traffic. Lower revenues in Kosovo could be attributed to a decrease in revenues from incoming calls due to the increasing use of free online voice applications.
When observing operating expenses, the Group recorded a decrease of 9% YoY, amounting to EUR 650.6m, with all operating expenses items down, besides D&A (+4% YoY). The most significant decrease was witnessed in the items other operating expenses (-53% YoY), due to one-off effects that are not part of ordinary operations, and the costs of services (-17%) mainly due to IFRS 16.
As a result of lower operating expenses, EBITDA recorded an increase of 11%, amounting to EUR 205.4m. Such a result puts the EBITDA margin at 30.4% (+4.5 p.p. YoY).
Going further down the P&L, in 2019 Telekom Slovenije recorded a net financial loss of EUR -28.14, compared to EUR 15.97m. Such a result could be attributed to two key reasons. The first one is that in 2018, finance income from the equity holdings was higher due to the sale of Blicnet, while the second one is that in 2019 other finance expenses include a loss of EUR 17.6m on the acquisition of a 34% minority interest in Planet TV (former Antenna TV SL), claimed on the basis of an arbitration award in the proceedings between Telekom Slovenije and Antenna TV SL Slovenia B.V.
As a result of the above mentioned, net profit sharply decreased (-96%) and amounted to EUR 1.2m. Excluding one-off events, the Telekom Slovenije would have generated a net profit of EUR 27.4m in 2019, representing an increase of 13% compared to 2018 adjusted net profit.
Turning our attention to CAPEX, in 2019 the company’s investment amounted to EUR 167.8m, which is an increase of 25% YoY. Of that, investments for the expansion of the fibre optic access network and customer equipment account for 56.6%.
