Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hellenic Telecommunication Organization SA (HLTOY, Financial) reported a 7% increase in group revenues, driven by solid performance in Greece.
- The company added 38,000 subscribers to its FTTH service in Q2, marking a 68% increase from the previous year.
- ICT revenues grew by 33%, reflecting strong demand for network IT and cloud computing services.
- The company maintained a high EBITDA margin of 38.6% in Greece, despite challenging conditions in Romania.
- Hellenic Telecommunication Organization SA (HLTOY) is optimistic about future growth, supported by government FTTH coupons and new wholesale agreements.
Negative Points
- Romanian operations negatively impacted overall performance, with mobile service revenues declining by 17% due to cuts in mobile termination rates.
- Group adjusted EBITDA after leases remained unchanged year-on-year, offset by negative contributions from Romania.
- Total operating expenses grew by nearly 12%, outpacing revenue growth due to increased interconnection and indemnity-related costs.
- Free cash flow after leases decreased by 16% compared to the second quarter of the previous year.
- The company faces ongoing challenges in the competitive Greek market, with fixed revenues remaining stagnant throughout 2024.
Q & A Highlights
Q: Can you provide more clarity on the FTTH volume discounts and the Nova deal?
A: (Michael Tsamaz, CEO) The FTTH volume discounts, approved by the European Commission and local regulator, offer up to 28% off the nominal regulated price, subject to volume commitments. This will maximize FTTH infrastructure utilization and accelerate customer migration. The Nova deal involves content sharing to combat piracy and grow the pay-TV market, making sports content more affordable and reducing incentives for piracy.
Q: What is the nominal regulated price for FTTH?
A: (Michael Tsamaz, CEO) The regulated price for FTTH is around EUR12 to EUR13, depending on the specific fiber product.
Q: How would you describe the interest from mobile and Nova in the FTTH wholesale agreements?
A: (Michael Tsamaz, CEO) Both mobile and Nova have shown strong interest. We expect to finalize the agreement with mobile soon, and Nova will follow in a few weeks.
Q: Have you received any feedback from Romanian authorities regarding the disposal of your asset there?
A: (Charalampos Mazarakis, CFO) The process is ongoing, and we expect developments in the next couple of months. We remain committed to finalizing this disposal.
Q: How will the FTTH wholesale discounts and government coupons impact your retail performance in 2025?
A: (Michael Tsamaz, CEO) The government coupons will subsidize customer connections and monthly access fees, allowing us to aggressively migrate customers to FTTH. We expect significant growth in 2025 as these initiatives take effect.
Q: Can you provide an update on the competitive environment and your CapEx expectations?
A: (Michael Tsamaz, CEO) The competitive environment remains stable, similar to other European markets. We expect to maintain our CapEx around EUR600 million annually for the next three years to complete our FTTH rollout by 2027.
Q: Will the new wholesale agreements stop the decline in high-margin wholesale revenues?
A: (Michael Tsamaz, CEO) The new agreements should stabilize wholesale revenues by incentivizing operators to use our FTTH infrastructure.
Q: What are your plans for voluntary retirement schemes (VS) in the coming years?
A: (Charalampos Mazarakis, CFO) We expect to continue VS programs to support our efficiency initiatives over the next couple of years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
