Telekom Slovenije 9M17: No big surprise in latest 9M17 result report.
Revenues are up by 3.4% YoY in 9M17 to EUR 546.7m, positively affected by new business revenue streams (like e-tolling) and also wholesale market development. Broadband data remains stable. However mobile segment continues to be under pressure with market share, connections and revenues all down, the later by 6.0% YoY to EUR 187.4. In addition margins remain under pressure, namely Group EBITDA margin being at 28.5% in 9M17 versus 30.1% in 9M16 with 3Q margin decline even more evident. All in all we can state that 9M17 results are in-line with our expectations but 4Q margins must rebound from 3Q. On the other hand lower interest cost and other items below operating line are still boosting net profit levels in 2017. The later is up by hefty 32.8% YoY in 9M17. As Telekom Slovenije Group guided EBITDA at 206.8m for 2017 and profit at EUR 41.3m, both numbers still look achievable. The news is consequently uneventful – especially given Telekom Slovenije trades at 4.7x EV/EBITDA and 11.0 P/E. However more important question and event would be their exit from Macedonia – which would deliver a hefty cash flow stream and as monetization of this investments would bring down EV/EBITDA to 4.1x. Target price remains at EUR 96 target price, recommendation remains buy.
Telekom Slovenije dd is a Slovenia-based company engaged in the provision of telecommunication services. The Company provides fixed and mobile communications, system integration and cloud computing, construction and maintenance of telecommunication networks, digital content and services, multimedia, digital advertising. It operates under the brands Mobitel and SiOL. The Company's services and products include business bundles, Centreks, Moneta, M vrata, among others. The Company is active in Slovenia, Kosovo, Macedonia, Bosnia and Herzegovina, Croatia, Montenegro and Gibraltar. On November 6, 2013, the Company concluded the transaction of transferring a 100% stake in the capital of PRIMO Communications SHPK to AD-Trade SHPK, Albania. The Company's major shareholder is Slovenska odskodninska druzba dd with a stake of 72.75%.
ALTA Invest, investicijske storitve, d.d., (ALTA Invest, investment services, Inc.) is a part of ALTA Group, the biggest financial non-banking group in Slovenia. ALTA Invest has around 28% market share on the domestic Ljubljana Stock Exchange and has more than EUR 95m of assets under management.
Our trading advantage is our execution of large trading blocks with low impact on the market. We offer trading on several platforms on numerous markets, with a wide variety of financial instruments. Our advantage is also a research department, which is both sell side and buy side and has the far most extensive and regular coverage of domestic companies. We cover 9 companies on Ljubljana Stock Exchange, which is around 90% of Mcap on LJSE – and here we are practically the only local broker providing this kind of extensive and regular coverage for Slovenian companies.
A part of ALTA Group are ALTA Skladi, a mutual fund asset management company with roughly EUR 260m of asset under management. ALTA Group is also extensively involved in corporate finance projects and raised considerable assets (fixed income and equity) in the last two years for several companies.
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