Q1 2021 Financial Highlights
In December, Síminn hf. and Crayon Group AS have signed a binding agreement on the sale of Síminn’s subsidiary, Sensa ehf., to Crayon. Settlement of the transaction took place at the end of the first quarter of 2021 and the purchase price was paid in full in April. The profit from the sale amounted to ISK 2,073 million. In the interim financial statements, Sensa’s operations are classified as discontinued operations and the information in the announcement is based on this change.
- Síminn’s revenue was ISK 6,408 million in the first quarter (Q1) 2021, compared to ISK 6,309 million in the same period of 2020. An increase of ISK 99 million or 1.6%.
- EBITDA was ISK 2,540 million in the first quarter of 2021, compared to ISK 2,638 million in the same period of 2020, down ISK 98 million or 3.7%. The EBITDA ratio was 39.6% in the first quarter of 2021, compared to 41.8% in the same period of 2020. The EBIT operating result is down by ISK 69 million or 5.8% compared to the same period of 2020 .
- Profit in the first quarter of 2021 was ISK 2,844 million, compared to ISK 762 million in the same period of 2020.
- Cash generated from operations was ISK 3,010 million in the first quarter of 2021, compared to ISK 3,380 million in the same period of 2020. Net cash provided by operating activities was ISK 2,574 million ISK in the first quarter of 2021, compared to 3,045 million ISK in the same period of 2020.
- Interest-bearing debt amounted to ISK 16.0 billion at the end of the first quarter of 2021, compared to ISK 15.9 billion at the end of 2020. Net interest-bearing debt amounted to 15.3 billion of ISK at the end of the first quarter of 2021, compared to 15.2 billion ISK at the end of 2021. end of 2020.
- Net finance costs amounted to ISK 187 million in the first quarter of 2021, compared to ISK 233 million in the same period of 2020. Finance costs amounted to ISK 202 million, finance income to ISK 59 million and loss exchange rate at ISK 44 million.
- Síminn’s equity ratio was 59.8% at the end of the first quarter of 2021 and shareholders’ equity was 39.4 billion.
Orri Hauksson, CEO:
„The year has started well and is in line with our expectations to make the most of the balance sheet and the operations of the various units of the group. The sale of Sensa was successfully completed with the acquisition of the company by the international IT company Crayon, in addition to which key projects in the field of mobile and network operations from Síminn were transferred to Míla. The Group is now financed with the aim of maximizing the results of a new distribution of tasks within the Group and of establishing the balance sheet according to the needs of the business units concerned. In early April, the company paid substantial funds to shareholders through a reduction in share capital and dividends.
Core operations were well acceptable in the first quarter of 2021 and in line with plans. Roaming revenue was significantly down year-on-year and the Group’s foreign currency spend increased year-on-year, leading to a slight decline in EBIT and EBITDA of year over year, but the first quarter of 2020 was one of the best in company history. Total revenue increased, however, partly due to higher equipment sales, which have a low margin. Net profit increased between the periods due to the gain on the sale of Sensa, but in addition, the permanent cost reductions that were undertaken in the spring of 2020 are bearing fruit and will take full effect this year.
So far this year, operations are promising. Revenues from advertising sales are increasing due to Síminn’s modified and personalized service to advertisers, who appreciate how it is becoming increasingly easy to reach well-defined target groups. Traditional linear television got a boost when the Saturday show with Helgi Björns broke all ratings records. Internet, TV and national mobile services maintained their revenue share, and the onboarding of significant new customers was successful despite adhering to Covid 19 restrictions.
As before, Míla focused on installing fiber optics throughout the country. However, construction is slowing down, compared to the huge efforts of previous years. There are fewer and fewer homes in the country that do not have fiber optic cables in the basement or outside wall of their homes, whether from Míla or other parts. However, there are still many urban areas in the countryside and it is unclear when these projects may be completed. The installation of fiber in the remaining buildings relies heavily on Míla’s cooperation with other developers and municipalities, so that costs in sparsely populated areas of the country do not prevent connection to homes and businesses. .
The earthquake and volcanic eruption in Reykjanes necessitated various measures to ensure the safety of people and telecommunications. New locations had to be connected, new mobile base stations were installed and the protection of the trunk network on the south coast of Iceland was reconsidered. All this went well in good cooperation with other electronic communications companies under the leadership of the state-run emergency services company Neyðarlínan. Síminn’s next plans are to activate new and improved television services, which will significantly increase flexibility for customers.
As detailed before, in recent months there have been systematic efforts to increase Míla’s independence within the Síminn Group, including the previously announced transfer of projects and changes to corporate financing. Major and rapid changes have taken place in recent months in the composition of telecom operators on international markets. Both domestic and foreign investors are thus showing increased interest in specializing in investments, including separating infrastructure assets from service companies in retail. Investment bank Lazard and Íslandsbanki have now been hired to advise on Míla’s strategic goals and future possibilities. Options regarding the future ownership of Míla will be explored with the aim of maximizing the value of Síminn’s assets for shareholders and ensuring that the future development of the Group’s infrastructure benefits the Icelandic public. It is unknown at this time what the outcome of this project will be, but more information will be provided on its progress as it becomes available.
Investor meeting April 28, 2021
An investor presentation will take place on Wednesday April 28, 2021 at 8:30 a.m. During the meeting, CEO Orri Hauksson and CFO Óskar Hauksson will present the financial results. The meeting will be held in Icelandic. Documents and a recording of the meeting will be available after the meeting on the Company’s Investor Relations website https://www.siminn.is/umsimann/quarterly-results and in Icelandic Nasdaq Company News.
The meeting will be webcast https://www.siminn.is/fjarfestakynning
Those who wish to ask questions can send them to [email protected] and they will receive a response at the end of the meeting.
Orri Hauksson, CEO, tel. +354 550 6003 ([email protected])
Óskar Hauksson, financial director, tel. +354 550 6003 ([email protected])