In Q1 2024, Telekom Slovenije recorded revenue growth of 4% YoY, an EBITDA increase of 10%, and a net income of EUR 12m, a 48% increase YoY.
Starting at the top of the P&L, Telekom Slovenije recorded revenue of EUR 169m, representing an increase of 4% YoY. This came because of higher prices for services and a higher number of users. So company realized higher sales of IT merchandise and services, as well as higher revenues from financial, eHealth, and insurance services, and finally, higher revenues on the wholesale market.
Breaking the revenue down by segments, revenues in the mobile segment of the end-user market increased by 2% YoY to EUR 64.7m, due to the higher revenues at IPKO, primarily due to an increase in the number of users. This was partly offset by lower revenues from the sale of mobile merchandise at Telekom Slovenije, but it also meant that associated costs were lower. Meanwhile, revenues in the fixed segment of the end-user market were 5% higher YoY and amounted to EUR 54m, primarily as a result of higher revenues from broadband services as a result of the growth in the number of users and sales of IT merchandise and services at Telekom Slovenije.
Revenues from additional services, which include revenues from financial services, eHealth services, and insurance, amounted to EUR 1.4m, growing by 13% YoY, with growth recorded across all categories. Next up, revenues from the wholesale market also grew by 8% YoY to EUR 42m, primarily from international wholesale traffic. On the other hand, other revenues and merchandise revenue decreased by 8% YoY to EUR 7m.
Telekom Slovenije revenue composition breakdown (Q1 2024 vs. Q1 2023, EURm)
Source: Telekom Slovenije, InterCapital Research
Moving on to operating expenses, they amounted to EUR 152m, growing by 1% YoY, mainly as a result of labour costs, which grew by 15% YoY to EUR 31.5m, while several other categories recorded decreases, most notably the cost of materials and energy, which declined by 42% YoY to EUR 5.6m. The increase in labour costs came due to the change in the method for the interim calculation of business and performance costs, with the estimated proportionate annual amount included in Q1 2024 results. Before, these effects were recorded at the time of payment or in the FY results. As such, this represents the normalization of effects for quarterly reporting.
Due to the revenue growth combined with slightly lower OPEX, EBITDA grew by 10% YoY to EUR 59.7m, implying an EBITDA margin of 35.3%, representing an increase of 2.1 p.p. YoY. The net financial result remained negative at EUR 3.6m but did record a slight 10% improvement YoY, mainly as a result of higher financial income, while fin. expenses remained roughly the same.
Finally, because of all of these positive changes, Telekom Slovenije recorded a net income of EUR 12.1m, growing by 48% YoY, and implying a net income margin of 7.2%, an increase of 2.1 p.p. YoY.
Telekom Slovenije key financials (Q1 2024 vs. Q1 2023, EURm)
Source: Telekom Slovenije, InterCapital Research
In terms of CAPEX, it amounted to EUR 45.8m in Q1 2024, decreasing by 2% YoY. Breaking this down, investment into Telekom Slovenije (Slovenia) amounted to EUR 44.9m, growing by 27% YoY, while investments into other companies in Slovenia declined by 85% YoY, to EUR 1.4m. Investments into Kosovo also decreased, by 77% YoY to EUR 1.7m.
For 2024, the Company set a target of EUR 717.4m in op. revenues, EUR 233.6m in EBITDA, EUR 43.2m in net income, and total investments of EUR 235.7m. If the current quarter is annualized, Telekom Slovenije would need to slightly increase its revenue, while in terms of EBITDA and net income, it would be able to surpass the goal if the current dynamic continues. Finally, the investments would have to increase by almost 30% if the 2024 objective is to be reached.
