Life at 3,500 MHz – Q2 Earnings review

DIGI has reported its Q2 2024 earnings and beat consensus estimate by 1.3% on the top
line and by 3% on the EBITDA front. Revenues increased by 14.1% YoY, mainly driven by
the Spanish segment where the revenue increased by 22.5% YoY. While the OPEX and DD&A
both increased YoY, the EBITDA grew by 16.4% YoY. EBIT increased 29.6% YoY and Net
profit came 80% higher YoY, beating the market consensus by 23%.
Key messages:
 The key markets, Romania and Spain have maintained a strong performance. The
underlying growth trend continued in the second quarter of 2024 as well. Total RGUs
have increased by 13.8% YoY and passed the historical milestone of 25 million clients.
The strong RGU growth was mainly driven by the Spanish mobile and broadband
segment which grew by 23.2% and 50.6% YoY, respectively. The customer base in the
Romanian segment further grew as well thanks to the attractive offerings DIGI have
provided, except the fixed telephony segment which continued to decline as it was
expected. ARPU decrease in the Other segment also contributed to a 4.8% QoQ RGU
growth.
 OPEX was in-line with consensus, showing an 12% increase YoY due to underlying
growth of the business. The EBITDA margin on a group level is slightly lower QoQ,
though it still shows 2.0% increase YoY and came in at 36%.
 In May, DIGI Romania has entered into a preliminary agreement for the acquisition of
the majority stake in Telekom Romania. The transaction is still subject to approval and
transaction price is not disclosed yet.
 DIGI secured an EUR 150mn term loan with 3-year maturity, which may be used to
refinance the EUR 450mn Senior Secured Notes outstanding which are due in 2025.
This is in line with our expectation as we earlier forecasted that DIGI would need
additional liquidity to refinance its outstanding bond by the end of 2024, according to
their plan.
 Portugal and Belgium launch of 2024 is still on track.