Telekom Slovenije 1H18: No big surprises with high dividend payment now behind investors.
Sales revenues decreased by 2.0% while margins somewhat contracted. Namely EBITDA margin lowered by 1.1% vs 1H17 as EBITDA amounted to EUR 100.9m. There is no specific culprit, but overall most of the segments experienced a pressure on revenues, while cost of goods surge balanced out a decrease in other cost items. Consequently, Telekom Slovenije is about EUR 4.5m behind our estimates in terms of EBITDA, mostly deriving from lower revenues. Nevertheless, we have not adjusted our estimates, especially as we were quite conservative regarding 2H18 and consequently are trailing management guidance for 2018. Also CAPEX trails as well. As for valuation, the main story was an exceptional dividend that was already paid out, which means Macedonian exit inflow upside is now behind investors. What multiples now show is that there is little upside. Same goes for DCF. Hold recommendation is still warranted with the main investment thesis being a future dividend in the range of EUR 5 to 6 per share indicated a strong dividend yield.
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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