In Q1 2022, Telekom Slovenije recorded a revenue decrease of -3.6% YoY, an EBITDA increase of 1.9%, and a net profit of EUR 11.9m, an increase of 23.3% YoY.
In total, sales revenue amounted to EUR 151.2m, a decrease of 3.6% YoY. This was due to several factors: Firstly, revenues from the mobile segment of the end-user market were down due to the optimisation of subscribers whose basic subscription fee includes an increasing number of services. Secondly, lower revenue from the sale of mobile merchandise, resulting in lower costs. Thirdly, revenues from the fixed segment of the end-user market were down due to a declining number of traditional connections and lower revenues from the sale of fixed merchandise. Also, Telekom Slovenije stopped the sale of electricity to end users, as of 1 January 2022. Finally, revenues from international voice services were lower.
Moving on to the operating expenses, they totaled EUR 136.4m, a decrease of 5% YoY. This was due to the lower revenue which resulted in lower COGS (-11.7% YoY), amounting to EUR 19.9m, as well as lower cost of services (-8.6% YoY), amounting to EUR 44.6m.
Because of the slightly higher decrease in OPEX compared to the decrease in revenue, the Company’s EBITDA amounted to EUR 56.7m, an increase of 1.9% YoY. This would also mean that the EBITDA margin equaled 37.5%, an increase of 2 p.p. YoY. The net financial result amounted to EUR -1.7m, an improvement of 23.6% YoY (Q1 2021: EUR 2.26m). Deferred tax expense amounted to EUR -1.2m, an increase in the expense of 40.2% YoY.
When all of this is combined, Telekom Slovenije generated a net profit of EUR 11.9m, an increase of 23.3% YoY.
Looking at the balance sheet, Telekom Slovenije’s total assets amounted to EUR 1.24bn, a decrease of -0.8% YoY, driven by both an increase in non-current as well as current assets. On the other hand, total liabilities amounted to EUR 628.7m, a decrease of -3.3% YoY. The decrease was driven by a decline in non-current liabilities, which declined primarily because the loans and borrowings decreased (-2.5% YoY) and amounted to EUR 301.4m, as well as a decrease in current liabilities, which declined by -5% YoY and amounted to EUR 213.9m. The decrease in current liabilities was driven by a decrease in trade payables, which decreased by -25.1% YoY and amounted to EUR 98.1m. Meanwhile, the net financial debt remained almost the same.
Telekom Slovenije key financials (Q1 2021 vs. Q1 2022, EURm)
The Impact of Russian-Ukraine Crisis
The Company also commented on the impact of the Russian-Ukraine crisis on its business. Telekom Slovenije is not directly linked to the Russian or Ukrainian markets. Because of this, there is not a significant direct impact on the Company’s cash flows and financial sources. At the same time, the Company adapted its activities and retail market portfolio due to the current inflationary pressures. To be more concrete, there has been a focus on specific user segments in order to ensure the stability of the subscriber portfolio. The Company also stopped forwarding transit traffic with operators from Russia and Belarus, while a bilateral agreement was concluded on the reduction of call termination prices in Ukraine and the Company’s network. Finally, supply chain disruptions and higher energy prices also have an impact on the Company’s performance.
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