Hellenic Telecom Organization S.A. (ADR) ((HLTOY)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Hellenic Telecom Organization S.A. (ADR) showcased a generally positive sentiment, with strong growth in revenue and strategic advancements, particularly in the broadband and mobile segments. However, the call also highlighted some concerns, such as declining international wholesale revenues and increased operating expenses. Notably, the completion of the Romanian market exit and the expansion of broadband coverage were seen as significant positives.
Exit from Romanian Market
The company successfully completed its exit from the Romanian market, which has led to a substantial improvement in annual cash flow and enhanced shareholder value. This strategic move will also result in an extraordinary dividend of EUR 40 million being distributed to shareholders.
Expansion of Ultrafast Broadband Coverage
Hellenic Telecom has entered into an agreement to expand ultrafast broadband coverage in rural and semirural areas across Greece. This expansion will cover an additional 480,000 homes and businesses, further solidifying the company’s commitment to enhancing digital infrastructure.
5% Revenue Increase in Greece
The company achieved a robust 5% increase in revenue in Greece, driven by strength across various segments including Mobile, TV, broadband, and ICT. This growth underscores the company’s successful strategies in its domestic market.
Strong TV Segment Growth
The TV segment experienced a remarkable revenue increase of nearly 17%, accompanied by a customer base expansion of 6.7%. This growth highlights the segment’s strong performance and increasing consumer demand.
FTTH and Broadband Growth
The Fiber-to-the-Home (FTTH) customer base increased to 509,000, with 38,000 net additions in the quarter. The broadband segment also achieved positive net customer additions, reflecting the company’s successful efforts in expanding its broadband services.
Mobile Segment Growth
Mobile service revenues increased by 2.7%, with a notable expansion of the postpaid customer base by 6.4%. This growth was driven by pre-to-post migrations and larger bundle adoptions.
ICT Segment Double-Digit Growth
The ICT segment delivered an impressive 38% revenue increase, highlighting strong momentum and the company’s ability to capitalize on digital transformation trends.
Free Cash Flow Guidance Upgraded
The company has upgraded its free cash flow guidance to EUR 530 million, reflecting the financial benefits from the disposal of its Romanian business. This update underscores the company’s improved cash flow position and strategic financial management.
International Wholesale Revenue Decline
There is an expected decline in international wholesale revenues, with certain activities being phased out. The company anticipates a reduction of approximately EUR 150 million by the end of the fourth quarter.
Higher Operating Expenses
Total operating expenses increased by EUR 34.3 million, primarily due to higher costs associated with top-line expansion, particularly third-party fees in the ICT segment. This increase reflects the company’s investment in growth and expansion.
Depreciation and Amortization Increase
The company reported higher depreciation and amortization costs in the third quarter, although these were described as seasonal. This increase is part of the company’s ongoing investment in infrastructure and technology.
Forward-Looking Guidance
Looking ahead, Hellenic Telecom Organization S.A. (ADR) has set a positive outlook with a 5% revenue increase in Greece and a notable 17% growth in the TV segment. The company is focused on expanding ultrafast broadband coverage and enhancing customer value through convergent services. Additionally, leveraging AI innovations is expected to drive future growth, with a strong emphasis on fiber and 5G infrastructure expansions.
In summary, the earnings call for Hellenic Telecom Organization S.A. (ADR) reflected a positive sentiment, driven by strong revenue growth and strategic advancements. Key takeaways include the successful exit from the Romanian market, significant expansion in broadband and mobile segments, and an upgraded free cash flow guidance. Despite some concerns over international wholesale revenue decline and increased operating expenses, the company’s forward-looking strategies and focus on digital infrastructure position it well for future growth.