Síminn hf. - Continuous Operation in Q2
Financial highlights Q2 2020
- In the quarter Síminn was charged ISK 500 million due to the Competition Authority‘s decision from the end of May, which has a negative effect on the quarter‘s result. Síminn has appealed the ruling to the Competition Appeals Committee and the result is expected later this year.
- Síminn‘s revenue amounted to ISK 7,276 million in the second quarter (Q2) of 2020, compared to ISK 7,115 million in the same period 2019. An increase by ISK 161 million or 2.3%.
- EBITDA amounted to ISK 1,938 million in Q2 2020, compared to ISK 2,602 million in the same period of 2019, down by ISK 664 million or 25.5%. The EBITDA ratio was 26.6% in Q2 2020, compared to 36.6% in the same period of 2019.
- Profit in Q2 2020 amounted to ISK 83 million, compared to ISK 798 million in the same period of 2019.
- Cash generated by operation amounted to ISK 3,095 million in Q2 2020, compared to ISK 2,087 million in the same period of 2019. Net cash from operating activities amounted to ISK 2,667 million in Q2 2020, compared to ISK 1,735 million in the same period 2019.
- Interest-bearing debt amounted to ISK 15.4 billion at the end of Q2 of 2020, compared to ISK 16.2 billion at the end of 2019. Net interest-bearing debt amounted to 14.5 billion ISK at the end of Q2 2020 compared to 16.0 at the end of 2019.
- Net financial expenses amounted to ISK 178 million in Q2 2020, compared to ISK 269 million in the same period of 2019. Financial expenses amounted to ISK 203 million, financial income ISK 44 million, and foreign exchange loss ISK 19 million.
- Síminn's equity ratio was 56.5% at the end of Q2 2020 and equity was 36.5 billion.
Orri Hauksson, CEO:
„The second quarter was very eventful for the Síminn Group. The underlying operations are going well, but there are many large deviations from the same quarter last year, primarily at Síminn hf.
The decrease in EBITDA between the second quarter of 2020 and 2019 was ISK 664 million, but ISK 298 million when looking at the first half of 2020 in comparison with the same period in 2019. The main reason is that the Competition Authority fined Siminn ISK 500 million due to alleged breaches of the company's settlement with the regulator. Without this fine, EBITDA would have increased by over ISK 200 million in the first six months of the year compared to the same period in 2019, which shows the strength of the operation and the results of the period. The fine was charged in the second quarter and paid at the beginning of the third quarter. Siminn believes that the Competition Authority has reached the wrong conclusion that harms consumers and competition. The company has therefore appealed the decision to the Competition Appeals Committee, which will issue its ruling shortly. The decrease in tourists to and from the country reduced roaming revenue by ISK 110 million between years during the quarter, in addition to which income from tourist prepaid cards decreased by ISK 20 million. Gain on sale of Síminn‘s store in Kringlan mall in Q2 2019 was ISK 164 million, which affects year-on-year comparisons. Costs due to layoffs for the quarter totaled ISK 125 million but was insignificant the year before. Síminn‘s staff has decreased significantly in recent years and the group now has over 550 FTEs.
Many things went better in the quarters than last year and partly better than expected. For example, Sensa's IT operations continued to deliver good results during the quarter, following an exceptionally promising start to the year. The company's project pipeline is good into the autumn. Various operating expenses of the group decreased, such as staff costs, travel and other things due to the pandemic. Marketing and IT costs also declined, but revenue that was subject to some uncertainty, such as advertising revenue, remained strong. Subscriptions to Síminn's TV content services and telecommunications services were also stable and defaults due to poorer employment conditions and difficulties in the operation of many companies have not yet occurred to any extent. However, this may change rapidly in the autumn, but so far the pandemic and the great limitations that have followed it as a whole have reduced the Group's EBITDA insignificantly.
Mila's operation is stable and solid as ever. Mila will take over more projects from Siminn in the coming months, such as the operation of a mobile radio access network (RAN) and IP network, and thus become larger part of the group. It is being considered to finance Mila separately instead of financing the group as a single unit.
In the next few months the focus will be on sharpening the division of tasks within the group and establish reduced operating costs, which have been adjusted to a new economic situation. According to surveys of consumer attitudes, Síminn hf. improved its services in recent months and we intend to continue on that path. More diverse possibilities will be developed in the use of our TV products and innovations in product packaging and pricing are being considered. Síminn has made an agreement to Gagnaveita Reykjavíkur to access their fiber optic network and will be able to offer its products over that extensive network next year.“
Investor meeting 26 August 2020
An investor presentation will be held on Wednesday 26 August 2020 at 8:30 am at Síminn’s headquarters in Ármúli 25, Reykjavík. During the meeting, Orri Hauksson CEO and Óskar Hauksson CFO 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 and in Nasdaq’s Iceland company news.
The meeting will be webcasted on
Further information
Orri Hauksson, CEO, tel. 354 550 6003 ( )
Óskar Hauksson, CFO, tel. 354 550 6003 ( )
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