Q4 2019

Q4 2018 interim statement has been restated according to changes made to treatment of TV rights.

  • Síminn‘s revenue amounted to ISK 7,896 million in the fourth quarter (Q4) of 2019, compared to ISK 7,544 million in the same period 2018. An increase by ISK 352 million or 4.7%.
  • EBITDA amounted to ISK 2,728 million in Q4 2019, compared to ISK 2,124 million in the same period in 2018, up by ISK 604 million or 28.4%. The EBITDA ratio was 34.5% in Q4 2019, compared to 28.2% in the same period in 2018. Considering changes due to IFRS 16, EBITDA at Q4 2018 amounted to ISK 2,586 million and EBITDA ratio was 34.3%.
  • Profit in Q4 2019 amounted to ISK 760 million, compared to ISK 2,436 million loss in the same period in 2018. In Q4 2018, the goodwill in relation to the operation of Míla ehf. was impaired by ISK 2,990 million. Without the impairment loss the profit for Q4 2018 would have been ISK 554 million.
  • Cash generated by operation amounted to ISK 2,092 million in Q4 2019, compared to ISK 2,333 million in the same period in 2018. Net cash from operating activities amounted to ISK 1,471 million in Q4 2019, compared to ISK 2,184 million in the same period in 2018.
  • Interest bearing debt amounted to ISK 16.2 billion at the end of 2019, compared to ISK 17.2 billion at the end of 2018. Net interest-bearing debt amounted to 16.0 billion ISK at the end of 2019 up by ISK 29 million compared to year end 2018.
  • Net financial expenses amounted to ISK 231 million in Q4 2019, compared to ISK 205 million in the same period in 2018, of that number ISK 66 million is related to IFRS 16 in Q4 2019. Financial expenses amounted to ISK 274 million and financial income ISK 45 million.
  • Síminn's equity ratio was 55.9% at the end of year 2019 and equity was 36.6 billion.

Orri Hauksson, CEO:

„Last year’s operations of the Síminn Group were solid and grew stronger as the year progressed. We were more than satisfied by the sales of our main product lines and the fact that Síminn appeals to the younger generation again. In addition, demand for Sensa's information technology products increased in the last quarter. However, such growth cannot be projected into the next quarters, as sales, implementation and consulting in the information technology segment can be volatile.

Demand for Síminn's television services increased during the year, especially in the latter part of the year. Such growth was largely foreseen as Síminn's new product, Síminn Sport, had full impact for the entire quarter. However, it is not football that our customers spend most of their time watching. Our most popular television content is our Icelandic material, children's material and foreign reality TV about young people in search of love. In January 2020, we saw for the first time the number of individually streamed shows on Síminn TV Premium go over one million per week, which is a new record and shows interest in Síminn's diverse content offering. FTTH investments helped with internet revenue growth and mobile services revenue in the consumer market has balanced again after major changes in recent years, in areas such as wholesale and roaming. However, the fierce battle for customers in our markets continues, especially in the corporate market.

Síminn controlled its costs during the year with various actions. Wage costs are by far the largest single item of expenses in the company, but full-time employees decreased by 52 between years. At the same time, customer satisfaction increased significantly, according to the Icelandic Consumer Satisfaction Index, and were pleased to see the same positive trend in customer satisfaction from other NPS metrics. There are many intra-connecting factors that create this result. These include increased stability in the operations of our back-end systems, a new Síminn app that facilitates self-service and various measures to reduce unforeseen customer costs. Our 4G mobile network now covers 99.4% of the country's households and we continue our development towards 5G. Síminn thus systematically continues to work towards increased customer satisfaction. The focus in 2020, among other things, is to further enhance the reliability of service for existing customers and offer various innovations in the TV side of the business.

The Group's telco systems performed well in the severe weather and power failure that hit Iceland in the end of the quarter. As usually, our technicians were well prepared, not surprisingly, as we are used to heavy storms and bad weather here in Iceland. The reserve power we have at our disposal, together with the utilization of other reserve power owned by other infrastructure companies, made sure that telecommunications remained largely active in urban areas, apart from a few power outages in some areas, which turned off the telco equipment for some time. In December, our Group spent tens of millions in unforeseen cost that was needed to insure connectivity and keep basic communications going. The telco’s in Iceland, together with Neyðarlínan, the National Emergency Service, and RÚV, the National Broadcasting Service, have now established partnerships to strengthen telecommunications in rural areas and more dispersed areas. In addition, Síminn, Sýn and Nova have launched preliminary talks on possible future collaboration regarding telco infrastructure in a broad sense. The aim is to utilize investments in the years to come in the most cost-effective way, and to see if and how the existing and future infrastructure can be shared. These talks will take into account the possibility to accelerate the development of new technologies, increase public safety, reduce waste and reduce environmental damage due to unnecessary construction.

Míla´s FTTH effort was well executed last year and 17,000 new homes can now be connected to Míla fiber-optic network. The increase in FTTH connections was particularly strong in other areas than Reykjavík and vicinity, which is a new and positive development for the countryside. The Míla FTTH network now extends to the majority of the country's homes and we have seen the peak of the Míla´s FTTH investments.  The Group´s investments in FTTH going forward will therefore continue decrease. Demand for Sensa´s cloud-based specialist services increased sharply last year. Sensa has acquired the information technology company HUX to further support the increased focus on cloud-based services, such as artificial intelligence, security and cloud based data-flow.

Overall, the Group is well positioned for 2020. Despite the country's slower economy, we expect both improved EBITDA margin and stronger cash flow between the years. “

Further information

Orri Hauksson, CEO, tel. 354 550 6003 (orri@siminn.is)

Óskar Hauksson, CFO, tel. 354 550 6003 (oskarh@siminn.is)


Attachments

  • Síminn 31.12.2019 EN
  • Síminn hf - Financial results Q4 2019
  • Investor presentation Q4 2019

© OMX, source OMX